Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

COUNTY OF SOUTH GLAMORGAN BILL [Lords] (By Order)

Order for consideration, as amended, read.

To be considered upon Tuesday next.

ANGLIAN WATER AUTHORITY BILL [Lords] (By Order)

Order for Second Reading read.

To be read a Second time upon Tuesday next.

ROYAL COUNTY OF BERKSHIRE (PUBLIC ENTERTAINMENT) PROVISIONAL ORDER CONFIRMATION BILL (By Order)

Lords amendments considered and agreed to.

CROMARTY PETROLEUM ORDER CONFIRMATION BILL (By Order)

Order for further consideration read.

To be further considered upon Thursday next.

Oral Answers to Questions — NORTHERN IRELAND

Guide Dogs for the Blind (Food Shops)

Mr. Dunlop: asked the Secretary of State for Northern Ireland what are the regulations governing the entry of guide dogs for the blind into food shops &c., in Northern Ireland.

The Under-Secretary of State for Northern Ireland (Mr. Ray Carter): No regulations have been made on this matter; but a circular of guidance will be issued in a week or so to district councils. The circular will suggest that, when public health inspectors are discussing with managers of food premises the exclusion of dogs, they should recommend that an exception be made in the case of guide dogs for the blind and that notices requesting customers not to bring dogs into the premises should specifically exempt guide dogs.

Mr. Dunlop: I thank the Minister for his reply. Is he aware that the practice of non-admission of guide dogs for the blind is widespread in places such as hotels, restaurants, bars and food shops in Northern Ireland? Will he make a public declaration of the regulations he has just mentioned in order to encourage all those who at present refuse admittance to guide dogs into their various premises to allow them in? The blind in Northern Ireland are just as blind as the blind in Great Britain, and they need this assistance.

Mr. Carter: Our attitude towards guide dogs for the blind is the same in Northern Ireland as it is for the rest of the United Kingdom. We hope that the circular to be issued in a fortnight's time will get wide publicity and that as a result guide dogs will gain admittance to all premises.

Quigley Report

Mr. Molyneaux: asked the Secretary of State for Northern Ireland if he intends to make an interim statement on the recommendations of the Quigley Report.

The Secretary of State for Northern Ireland (Mr. Roy Mason): I have already drawn attention, in my preface to the


report, to the fact that it is essentially a discussion document. Arrangements have been made for a wide range of interests in Northern Ireland, including the political parties and both sides of industry, to make their considered views on the report known to the Government between now and the end of the year. At this stage, therefore, I have nothing to add to what I said in the preface.

Mr. Molyneaux: May I be permitted, on behalf of my colleagues, to extend our congratulations and good wishes to the right hon. Gentleman and say that we look forward to working constructively with him and his ministerial team in the interests of all the people of Northern Ireland? Mindful, as we are, of the fact that the conflicting options in the Quigley Report will have no immediate effect on the serious unemployment situation in Northern Ireland, may I ask whether the Secretary of State agrees that as far as the future is concerned, expenditure of public money will not render viable that which is manifestly non-viable and, as experience has shown, will merely make the second state worse than the first?

Mr. Mason: I am obliged to the hon. Member for what he said in the first part of his question. On the second part, I am particularly keen to monitor the financing of projects in Northern Ireland to make sure that the type of mistake to which the hon. Gentleman referred does not happen again.

Mr. McNamara: What will be the nature of the new forum which will discuss the Quigley Report with my right hon. Friend in January?

Mr. Mason: I do not know yet, because we have established a small working party which has now been given its terms of reference to report by the end of the year on the size of the new forum. I do not know what title it will be given or what its composition will be. I hope that the trade unions, representatives of trade and commerce and members of the political parties will have perused the Quigley Report by then and will have sent in their written observations for the benefit of the forum from its outset.

Mr. Mates: One of the points discussed in the report is the future of the Economic Council. Has the right hon. Gentleman any plans to broaden the scope of that Council to include elected or previously elected representatives of Ulster upon it? If there is to be a prolonged period of direct rule it is important, particularly in economic matters, for there to be local representation on all these groups.

Mr. Mason: I do not know whether I would agree with the hon. Member's latter point. The Economic Council has been disbanded. I chaired the last meeting 10 or 14 days ago when the Quigley Report was put before the Council. A working party has now been set up to consider the establishment of a forum to discuss economic and industrial problems in Northern Ireland. I hope that the forum will be able to sketch out the framework and strategy for the future of industry in Northern Ireland and to extract the priorities from the Quigley Report.

Mr. Kilfedder: Is the right hon. Gentleman aware that the people of Northern Ireland, at this time of unprecedented unemployment, will think that he is stalling on this matter? As Secretary of State for Defence, the right hon. Gentleman slashed thousands of jobs in defence establishments in Northern Ireland in record time—

Mr. Speaker: Order.

Mr. Kilfedder: Will he act with equal speed in implementing the Quigley Report?

Mr. Speaker: Order.

Mr. Mason: The hon. Gentleman ought to put his tongue in his cheek and be grateful for the consideration and priority that I have given from the outset to the economic and industrial problems of Northern Ireland. Anyone who has been watching the scene in the past two months will be fully acquainted with that fact. The hon. Gentleman must also be aware that, despite the fact that we had a defence review and a cut of £1,000 million in public expenditure, it was only on the third round of cuts that Northern Ireland was affected. Scotland, Wales and parts of England were affected first.

Mr. Watkinson: What are my hon. Friend's views on the central proposition in the Quigley Report that there must be a job stabilisation programme in the immediate future? Is he satisfied from his talks with industry that he is given sufficient notice of problems facing individual firms? Is there any prospect of regional aid from the EEC?

Mr. Mason: Regional aid is forthcoming from the EEC and goes into the national Exchequer to help sustain the regional programme. Job stabilisation is the most important aspect of the report. It is very difficult to maintain the present level of employment in Northern Ireland when many firms are subsidiaries of parent companies and, in present economic circumstances, the tentacles are likely to be cut off before the main body.

Mr. Biggs-Davison: May I warmly congratulate the right hon. Gentleman on his appointment and express the hope that he will not transfer too many Questions to Ministers who are not primarily concerned with Northern Ireland? What are the right hon. Gentleman's plans for a debate on the Quigley Report? Could it be on the Floor of the House so that hon. Members from all parts of the United Kingdom may express their views?
Since the Quigley Report recommended an entrepreneurial role for the State, will the right hon. Gentleman be in a position soon to say something about Strathearn Audio, the pioneers in this field, about which there has been a great deal of concern, particularly since the Touche Ross Report?

Mr. Mason: I cannot go into the Strathearn Audio case at the moment. My right hon. Friend the Home Secretary, when he was Secretary of State for Northern Ireland, said on 2nd July that he was prepared to allow unlimited debates in the Northern Ireland Committee, and I think that that would be an excellent forum for the first consideration of the Quigley Report.

Green Pound

Mr. Peter Mills: asked the Secretary of State for Northern Ireland what steps he will take to protect the food industry and farmers from the consequences of

the decision of Her Majesty's Government not to revalue the green pound.

Mr. Farr: asked the Secretary of State for Northern Ireland what steps he is taking to control the situation that has arisen due to the failure of Her Majesty's Government to revalue the green pound.

The Under-Secretary of State for Northern Ireland (Mr. James A. Dunn): The decision not to revalue the green pound led to a serious shortage of stock being presented for slaughter in Northern Ireland. After consulting my right hon. Friend the Minister of Agriculture, Fisheries and Food, my right hon. Friend the Secretary of State announced on 19th October the introduction of a scheme on the lines of the former Meat Industry Employment Scheme which is intended to protect some 3,000 jobs in the beef and pig processing and ancillary service industries in Northern Ireland. It will also reduce the prices of meat in Northern Ireland shops to levels comparable to those in Great Britain.
The scheme will initially run for four weeks, during which time it will cost about £1 million. Meanwhile, I shall be keeping the situation under review and examining other methods of solving these problems.

Mr. Mills: Is the hon. Gentleman aware that, in spite of these measures, much damage has already been done to the food and slaughterhouse industries in Northern Ireland because of the disparity? Will he make the strongest representations to see that we start to adjust the green pound not only in the interests of agriculture but, in the longer term, in the interest of consumers as well?

Mr. Dunn: The hon. Gentleman took part in a debate on Friday last week when it was made clear by my right hon. Friend the Minister of Agriculture, Fisheries and Food that the maintenance of the present level of the green pound was essential to countering inflation.

Mr. Ioan Evans: Does my hon. Friend agree that the fact that the Government have not revalued the green pound means that housewives and consumers in Northern Ireland and Great Britain will be able to buy food at lower prices than if the green pound had been revalued? Does he agree that we have to change the


common agricultural policy, and will he call on his right hon. Friends to work for a change for the benefit of farmers and consumers in this country?

Mr. Dunn: I agree with what my hon. Friend said about prices. The maintenance of the voluntary social contract is important to Government policy. Like my hon. Friend, I wish to see the CAP revised to take account of new circumstances.

Mr. Farr: Is the hon. Gentleman aware that certain sectors of the Northern Ireland economy are at risk because cattle producers can smuggle their animals across the border and get an extra £35 or £40 per head? Is he aware that, until that situation is rectified, certain sectors of the economy in Northern Ireland will be in grave danger? What is he going to do about it?

Mr. Dunn: The hon. Gentleman should know that it was because of the situation which he has described that we reintroduced the Meat Industry Employment Scheme in a modified form. The border presents grave difficulties of supervision, and we have called on all the agencies to assist us in this matter. Cattle can be apprehended on the Northern Ireland side of the border, but there are difficulties once they get over the border. We have asked the Irish Republic for help.

Rev. Ian Paisley: Is the hon. Gentleman aware that the housewives and the meat plants in Northern Ireland are grateful for the speedy intervention by the Government in this matter? Will he note that in Northern Ireland there is a strong body of opinion that the Common Market should not be a one-way street and that, if we are paying in, it is time that the Market paid something to us?

Mr. Dunn: I am grateful for what the hon. Gentleman has said. I share his view.

Border Movements (Smuggling)

Mr. Wm. Ross: asked the Secretary of State for Northern Ireland if he is satisfied with the degree of control of movement of persons and farm stock at the land frontier between the United Kingdom and the Irish Republic.

Mr. Dunn: As long as there is any evidence of smuggling, I cannot be satisfied. As far as the smuggling of stock is concerned, I would refer the hon. Member to the answer to the Question asked by the hon. Member for Devon, West (Mr. Mills).

Mr. Ross: Is the hon. Gentleman aware that the smuggling of large numbers of live and very noisy animals is an indication of poor control at the border? Will he give an undertaking to increase the security forces on the border, as this would have beneficial effects not only in regard to cattle smuggling but in relation to the movement of arms and explosives?

Mr. Dunn: My colleagues have been devising all sorts of responses to that question. The hon. Member will be aware of the difficulties of dealing with the border problem. We are aware that live pigs and dumb pigs are crossing the border. The problem is to apprehend them. It is rather like trying to catch greased pigs on a sports day. One moment they are there, the next moment they are not.

Mr. Hardy: Is my hon. Friend aware that the practice of smuggling in Northern Ireland is long-standing and that the animals making the noise of which the hon. Member for Londonderry (Mr. Ross) complains are probably descendants of animals who were smuggled many generations ago?

Mr. Dunn: I have no way of contradicting or admitting that.

Mr. Powell: How can there be any satisfaction with control on the movement of persons between the Republic and the United Kingdom when it is possible for a person who has been judicially deported from this country to return no fewer than 14 times, as recently happened? Is the Secretary of State aware on how many occasions Mr. Dundon returned to the United Kingdom through Northern Ireland?

Mr. Dunn: With respect, I was dealing with another problem. I am sure that my right hon. Friend has heard the right hon. Gentleman's question, but it is not a matter for me.

Prisoners

Mr. James Lamond: asked the Secretary of State for Northern Ireland what


is the number of prisoners in Northern Ireland prisons; and what is the range and average of sentence.

The Minister of State, Northern Ireland Office (Mr. J. D. Concannon): The total number of prisoners on 24th October 1976 was 2,667. This included 1,867 sentenced prisoners, of whom 1,163 were special category, 660 were untried prisoners and 140 were borstal trainees. The sentences being served ranged from two weeks to life imprisonment. The average for those serving determinate sentences at 3rd October, the latest date for which the figure is available, is 6·38 years.

Mr. Lamond: Is the number of special category prisoners reducing, and what is the average length of sentence being served by that category of prisoners?

Mr. Concannon: The ending of special category status has reduced the number of special category prisoners, and the number has been stabilising for a short time. If we except the 132 prisoners serving life sentences, there are 1,031 prisoners serving sentences totalling 8,565 years, an average of 8·31 years per prisoner.

Mr. Carson: Is the Minister aware that many prisoners on remand at the Crumlin Road Prison are refusing to leave their cells for fear of being attacked by other prisoners on remand? Does he agree that in Northern Ireland, although one would like to see it, it is impossible to have full integration in schools and other places? Surely the only sensible thing to do now for murderers and men who have not yet been found guilty is to provide segregation?

Mr. Concannon: My remit from the House was to end special category status, and the one thing I do not recognise now is a Protestant prisoner or a Catholic prisoner. I recognise merely prisoners.

Mr. McNamara: How many prisoners have applied for special category status since the ending of that form of imprisonment? How many people who would otherwise have been granted that status have gone cheerfully—perhaps that is not quite the right word—into cellular accommodation, no longer being of special category status?

Mr. Concannon: It is my guess—I stress that it is my guess—that about 20 of those

convicted since the ending of special category status would have claimed that status. Of those 20, I think that seven who have claimed special category status and are not receiving it are refusing to wear prison clothing. They are protesting against not being allowed special category status. There are a further four who, although conforming to prison rules and cellular accommodation, have submitted written application for such status. I should guess that about 20 is the overall total.

Royal Ulster Constabulary (Recruitment)

Mr. Freud: asked the Secretary of State for Northern Ireland what his plans are for recruitment into the RUC.

Mr. Dunn: My right hon. Friend the then Secretary of State outlined to the House on 2nd July the plans for increasing the effectiveness of the police. He referred in particular to energetic steps to secure an increase in the strength of the force. Recruitment during the past year or so has been very satisfactory, and every effort is being made by the Chief Constable and Police Authority to maintain this encouraging rate of progress.

Mr. Freud: On behalf of my right hon. and hon. Friends, I extend congratulations to the Secretary of State on his appointment. I entirely accept what the Under-Secretary has said, but will he bear in mind that the Royal Ulster Constabulary is still significantly below the strength that the Chief Constable would like? Will he also bear in mind that, while the cost of training is substantial the saving that would be effected, in the light of £1 million a week paid in compensation for terrorist activities, would make very light of that cost?

Mr. Dunn: Any shortfall below the full quota for the force is a matter of some anxiety and concern. I must draw the hon. Gentleman's attention to the fact that since 1970 about 3,000 recruits have been accepted into the force and that the present strength of the RUC is 5,200 men against an establishment of 6,500. Energetic steps are continuing. This is a matter for the Police Authority and the Chief Constable, but we shall


certainly give whatever help we can in these objectives.

Mr. Marten: Following the point made by the hon. Member for Isle of Ely (Mr. Freud) about compensation, may I ask why £12,000 was paid to Mr. Guigan in compensation?

Mr. Dunn: That is not a matter for me. There is a Question on the Order Paper.

Rev. Ian Paisley: Does the hon. Gentleman agree that if an announcement were made soon about the new training school for the RUC it would be helpful in increasing the number of recruits for the Royal Ulster Constabulary?

Mr. Dunn: It would be a help, but that is a matter for the Police Authority in the first instance.

Security

Mr. Gow: asked the Secretary of State for Northern Ireland whether he will make a statement about the security situation in the Province.

Mr. Goodhart: asked the Secretary of State for Northern Ireland whether he will make a statement about the security situation.

Mr. Mason: Attacks by the Provisional IRA upon the security forces have led to the deaths during the past three months of three policemen and five soldiers. Twenty-four persons have been killed by sectarian gangsters from both communities. So far this year, 1,037 persons have been charged with terrorist crimes, including 88 charged with murder and 89 with attempted murder. A growing number are being caught red-handed.
The greater efficiency of the security forces and the people's revulsion from violence are closing the net on terrorists. They know they cannot win. The police and the Army perform their difficult and onerous duties with skill, bravery, tact and compassion that could not be equalled by forces anywhere else in the world. I know that they have the full-hearted support of the House.

Hon. Members: Hear, hear.

Mr. Cow: I join the Secretary of State in his tribute to the security forces, but

will he acknowledge that serious damage was done to the morale of the security forces by the policy of his predecessor in engaging in conversations with the political representatives of terror? Will the right hon. Gentleman confirm that he on his part will give an undertaking that there will be no further discussions between him or his officials and the political representatives of the IRA?

Mr. Mason: There have been no talks for some months and there are none pending. I shall not use the words "never again" as they have been the proverbial graveyard of many politicians. Therefore, I should prefer not to use those words.

Mr. Gould: Does my right hon. Friend agree that the law on Government compensation for criminal injuries in Northern Ireland is urgently in need of review and that the 1968 Act has been shown by the case of my constituent, Mrs. Ann Maddocks, to be totally inappropriate for the purpose of effectively compensating the widows of soldiers killed in Northern Ireland?

Mr. Mason: The provisions concerning injury to persons are now under review. I hope that my hon. Friend and the rest of the House will try to separate these matters of compensation. Although the weekly amounts in many cases may seem relatively small for a soldier's widow. we must bear in mind that they stretch over a period and that with their full benefits, including pension, they can be quite large sums. Secondly, cases at home are not for me but for my right hon. Friend the Secretary of State for the Home Department. Thirdly, false analogies are being made in the Press about the 14 who were found to have been ill treated by Her Majesty's Government and who merited compensation by Her Majesty's Government. They are now 'being paid off, but we must remember that they are in a separate category.

Mr. Goodhart: Does the right hon. Gentleman agree that the calamitous remarks made by Mr. Jimmy Carter in the heat of the American presidential campaign are likely to encourage the men of violence and to lead to increased bloodshed in Northern Ireland? Does he agree that the men of violence are likely


to be encouraged by the appointment of a leader of the "Keep The British Troops Out" movement to head the official Labour Party Study Group on Northern Ireland?

Mr. Mason: I think that it would be very dangerous for anyone, irrespective of who he or she is, to make comments that might give aid or succour to the Provisional IRA. Secondly the person concerned is a candidate in an election. He is not the President of the United States. The present Administration has always recognised the special problem of Northern Ireland. It has recognised that it is a domestic matter for this country.

Mr. Craig: Will the right hon. Gentleman explain why the supporters of the IRA were permitted last Saturday to hold an march, and during that march to attack a lawful procession held by the peace movement?

Mr. Mason: It is difficult to stop people from amassing in places like Belfast, North or West. They can easily, by word of mouth, get 200 or 300 people who in turn can fetch others from outside Belfast and thereby soon get a quite large gathering. I do not think that any permit was required. Consequently, it was a spontaneous act against the genuine and sincere peace women of Northern Ireland.

Miss Maynard: Does my right hon. Friend think that the policy now being pursued by the Government is succeeding in Northern Ireland?

Mr. Mason: Yes, I do. If I understand my hon. Friend's policy right, it would be disastrous if we attempted to operate it.

Mr. Neave: I should like to wish the right hon. Gentleman well on his difficult appointment. I am sure we all feel that we should offer him our congratulations.
What steps is the Secretary of State taking to put a stop to the activities of the top terrorists in Northern Ireland who are still walking around scot-free as members of illegal organisations, acting as godfathers to young people and hiring them to commit murder? Is he aware that we are disappointed that he did not give any undertaking to my hon. Friend the Member for Eastbourne (Mr. Gow) regarding talks with the Provisional Sinn Fein, which was a most dangerous policy

and encouraged terrorism during the past 18 months?

Mr. Mason: The hon. Gentleman will recognise that there is no need for me to repeat what I said. It is on record and there it stands. I am obliged to him for what he said initially.
I am looking into the godfather law. I hope that we shall be able to find some means whereby we can use the law to put these senior criminals behind bars. However, it is not very easy to frame the law to do it.

Special Interrogation Centres

Mr. Thorne: asked the Secretary of State for Northern Ireland what is his policy in respect of special interrogation centres in Northern Ireland.

Mr. Mason: There are no special interrogation centres in Northern Ireland.

Mr. Thorne: May I urge my right hon. Friend to beware of those bringing warm welcomes today in regard to his policies in future? Is he satisfied that the conditions under which prisoners are dealt with in Northern Ireland fully accord with the conventions laid down by the International Court of Justice at The Hague and other bodies?

Mr. Mason: I am always wary of politicians conveying thanks and paying warm tributes to political opponents. It would have been very nice had my hon. Friend conveyed his. Nevertheless, I know that he takes a great deal of interest in Northern Ireland affairs and I look forward to working with him.
Regarding the law and The Hague rules, I should inform my hon. Friend that the Emergency Provisions Act and the operations of the Prevention of Terrorism Act make some difference because of the special circumstances prevailing in Northern Ireland.

Mr. Mates: In view of what happened as a result of the interrogation centres in Northern Ireland, why is the right hon. Gentleman so reticent about answering the Question asked by my hon. Friend the Member for Banbury (Mr. Marten)? Why has he transferred it to the Ministry of Defence? Has the Northern Ireland Secretary washed his hands of this matter? If this is a long-standing arrangement, will he tell us what the position was when


he was Secretary of State for Defence some weeks ago?

Mr. Mason: The Question has been transferred to where the prime responsibility lies. There is another Question on the Order Paper today, and, provided that the House is not too dilatory, we might reach it and get the reply to it.

Fair Employment Act

Mr. Fitt: asked the Secretary of State for Northern Ireland whether he will make a statement on the working of the Fair Employment (Northern Ireland) Act.

Mr. Concannon: The Act comes fully into operation on 1st December 1976. Meanwhile the Fair Employment Agency has been established and the Department of Manpower Services has circulated a draft guide to manpower policy and practice to interested persons for comment.

Mr. Fitt: On how many occasions has the Agency met so far, and what payment has been made to its members? Has it embarked, on a questionnaire basis, on finding out whether firms in Northern Ireland are engaging in political and religious discrimination?

Mr. Concannon: I am glad that my hon. Friend is still taking an active part in this legislation. I should like to thank him for the assistance he gave us when it was going through the House. The main part of the legislation does not come into force until 1st December. All we have done is to set up the Agency. All the other aspects will come into force on 1st December, when the Agency will get down to its job. The chairman will be salaried. The other members of the Agency will be paid an attendance allowance plus expenses and travelling.

Government Policy

Mr. Townsend: asked the Secretary of State for Northern Ireland if he will either take an independent political initiative in Northern Ireland or step up the level of activity of the security forces.

Mr. Mason: No, Sir. There is no change in our position.
Northern Ireland is part of the United Kingdom unless a majority of the population want this changed.
The Government want a devolved Government, but, as we have consistently made clear,
no system of government within Northern Ireland will be stable or effective unless both parts of the community acquiesce in that system and are willing to work to support it." —[Official Report, 2nd July 1976; Vol. 914. c. 809.]
This means a system which will command widespread support throughout the community and in which both the majority and the minority will participate.
Until there is a devolved Government, in Northern Ireland, the Government here are responsible for ensuring that Northern Ireland is governed. They will not shirk this responsibility. But the representatives of the Northern Ireland people must find agreement. This cannot be imposed. They must find a will to work together. There is no other way.

Mr. Townsend: Will the Secretary of State continue to take a positive attitude on Northern Ireland? Does he appreciate that the Government are under an obligation to try to get reconciliation and cooperation between the various warring factors in Northern Ireland?

Mr. Mason: I have been determined, since I came into office, to ensure decisive and determined direct rule. That is what we are pursuing. If the old Stormontonians feel that they can cross the divide and come together and bring forward some solution for a partnership Government, I shall be prepared to listen.

Mr. Fitt: May I take it that the Secretary of State's reply this afternoon means that there has been no change in policy since the announcement on 12th January, when the then Secretary of State, in clear and unequivocal terms, said:
We must find a way in which both communities are involved in government in Northern Ireland".—[Official Report, 12th January 1976; Vol. 903, c. 64.]
Is that the stated position of the Government? The word "acquiesce" could create some doubt.

Mr. Mason: My hon. Friend will recognise that initially I said
There is no change in our position.
I also said that we would have the majority and the minority participating.

Mr. Fitt: In government?

Mr. Mason: I think that covers the position.
Incidentally, while I am on my feet, and as my hon. Friend the Member for Belfast, West (Mr. Fitt) has risen to ask a question, I should like to praise his courage. I suppose most hon. Members are aware of my hon. Friend's act some weeks ago. It was a courageous act, an example to his party and to the people in Northern Ireland, especially now that he is prepared to stand up in court and identify those who were prepared to terrorise him.

Mr. Neave: Is the Secretary of State aware that his answer to my hon. Friend the Member for Bexleyheath (Mr. Townsend) is welcomed by the Opposition? It is very much in line with what we said on 12th January in the debate on the Convention Report and with what I have repeated recently in published correspondence. Our policy is for a devolved Government within the Province. Our position has not changed. Will the right hon. Gentleman continue to encourage inter-party talks so that all the options can be discussed fully, if possible in private?

Mr. Mason: I am obliged to the hon. Gentleman for those remarks. I shall certainly encourage the parties involved. There are seven major political parties in Northern Ireland, all of which have different viewpoints on how the devolved Government should come about. There has already been reconnaissance between the SDLP and the Official Unionist Party, and I know that members of the Democratic Unionist Party are trying to get talks going. I shall encourage them and be ready to listen to their views.

Mr. Powell: Is the Secretary of State aware that the two matters mentioned in the Question are in no sense alternatives to one another and that to take a political initiative for the sake of taking a political initiative could be very harmful to the successful development of the security situation?

Mr. Mason: I agree with the right hon. Gentleman. The security situation at the moment has not changed. There are still 14,500 troops backing up the RUC in Northern Ireland. Those troops will remain as long as the security situation exists. I hope that all the parties in

Northern Ireland will use their initiative and bring their results to me.

Mr. Litterick: In view of his initial answer, will my right hon. Friend bring forward such evidence as he has, particularly from the history of the last 52 years, to suggest that Ulster is governable as long as it remains an integral part of the United Kingdom?

Mr. Mason: It is governable now and it is being governed.

Secondary Education

Mr. McCusker: asked the Secretary of State for Northern Ireland how many representations he has received concerning his consultative document on the reorganisation of secondary education in Northern Ireland.

Mr. Carter: To date, some 30 letters have been received. It was recently announced that the closing date for the submission of views would be extended until Easter 1977, and accordingly the main bulk of submissions is not to be expected for some time yet.

Mr. McCusker: Is the Minister aware that consciouness of his proposals is only now beginning to show on the surface in Northern Ireland? Will he bear in mind the example set by the Minister of State that when dealing with legislation of such importance to the Northern Ireland community full consultation is essention? Will he consider extending the time limit for representations until the middle of next year?

Mr. Carter: I have already said that we have extended the time limit. Most of the letters that I have received on the subject have requested an extension, which we have granted.

Mr. Biggs-Davison: Is the Minister aware that we welcome the extension of the period for consultation? Since education will be a matter for the future devolved Government, will he please take care not to prejudice in any way the future of good independent grammar and other secondary schools, otherwise, a new element of discord will be introduced into an already troubled province?

Mr. Carter: The Government have no intention of foisting a new educational


system on Northern Ireland. The consultative document is the result of discussion which started back in the days of Stormont. There is no intention to undermine the excellent education system in Northern Ireland.

Employment (Young Persons)

Mr. George Rodgers: asked the Secretary of State for Northern Ireland if he will describe the extent of the special measures taken to provide job opportunities for young persons in Northern Ireland.

Mr. Concannon: The recruitment subsidy for school leavers and the youth employment subsidy have been applied in Northern Ireland as in the rest of the United Kingdom. In addition, employment for young persons is provided through the Enterprise Ulster and Young-help schemes. The effect of these measures has been to create almost 1,700 openings for young persons.

Mr. Rodgers: Does my hon. Friend agree that many young people are loose on the streets in Northern Ireland and are often involved in ugly situations because of the lack of job opportunities? Will he co-operate with the Department of Employment to ensure that measures such as the work swap scheme and the work experience scheme are introduced into Northern Ireland as soon as possible?

Mr. Concannon: We already have special schemes in Northern Ireland, and we have had them for some time. We are, therefore, a bit in front. In the last package, £95,000 was spent on young people in Northern Ireland. I shall be looking at the job release scheme and examining other special schemes to see whether we can give more money to them.

Democracy

Mr. Flannery: asked the Secretary of State for Northern Ireland what major steps have been taken to extend democracy in Northern Ireland since the present emergency began.

Mr. Mason: Among the changes in Northern Ireland since 1969 have been the introduction of universal suffrage for local government elections, the lowering to 18 of the voting age at all elections,

and the introduction of proportional representation in local government and provincial elections.

Mr. Flannery: I thank my right hon. Friend for that answer, and I hope that he can extend the list in the near future. Important as security is—it naturally tends to dominate Question Time—does not my right hon. Friend agree that the solution for Northern Ireland must be political? May we have a full-scale debate on Northern Ireland as soon as possible?

Mr. Mason: A debate would be the responsibility of my right hon. Friend the Leader of the House. My right hon. Friend the present Home Secretary said on 2nd July that the Northern Ireland Committee could be used as many times as required for that purpose.

Mr. Powell: Is it not appropriate to welcome the support of the hon. Member for Sheffield, Hillsborough (Mr. Flannery) for the principle of decision by majority in Northern Ireland? Is the Secretary of State aware that one of the most important advances still necessary for democracy in Northern Ireland is an extension of real local government as it is enjoyed in the rest of the United Kingdom?

Mr. Mason: I recognise that the right hon. Gentleman is really referring to the Macrory gap. There are 26 local councils in Northern Ireland, and there is a gap between that level and central Government. If the right hon. Gentleman can encourage members of the old Convention and other politicians in Northern Ireland to get together to try to bridge the gulf so that all parties concerned can acquiesce in a form of partnership in government, I shall be prepared to consider their solutions.

Oral Answers to Questions — BLACKPOOL

Mr. Blaker: asked the Prime Minister when he last paid an official visit to Blackpool.

The Prime Minister (Mr. James Callaghan): I last paid an official visit to Blackpool on 25th April when I addressed the annual conference of the Union of Shop, Distributive and Allied Workers.

Mr. Blaker: Is the Prime Minister aware that when my constituents hear that Mr. Ponomarev worked closely with Stalin and therefore is an accessory to the slaughter of millions of his countrymen, that he played a prominent part in organising the invasion of Czechoslovakia and that his present objective is to mastermind the destruction of our own liberty, they will find it difficult to understand why he was invited here by the Labour Party and particularly why he has been received by the Prime Minister?

Hon. Members: Answer.

The Prime Minister: I wanted to give hon. Members opposite the chance to have their demonstration before I answered. [HON. MEMBERS: "It has not started yet."] If it has not started, that was a pretty good beginning. I say to Opposition Members that insulting words do not make for good relations between us and a powerful country of great importance to the whole future of Western Europe. If I had to sum up the attitude that we should adopt I would do it in the words not, alas, of the present holder of that name but of his predecessor, Winston Churchill, "Jaw, jaw is better than war, war."

Mr. Heffer: Does not my right hon. Friend agree that much of the Press comment about the visit is misguided? When the National Executive of the Labour Party invites a delegation to this country from the Soviet Union in response to a delegation that visited the Soviet Union two years ago, it does not determine who is on that delegation. We should have objected if my hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo), who is a Jew and a Zionist, had been refused admission to the Soviet Union by the Russians.

Mr. Sandelson: rose—

Mr. Heffer: Is it—

Hon. Members: Give way.

Mr. Speaker: Order. Mr. Heffer.

Mr. Heffer: rose—

Hon. Members: Give way.

Mr. Speaker: Will the hon. Gentleman complete his question?

Mr. Heffer: I have no intention of repeating it, Mr. Speaker. I have already made it clear that I am merely asking my right hon. Friend to confirm that this matter should be put in perspective, and I am by no means a great friend of the Soviet system.

The Prime Minister: The position is quite clear. We have both trading and political connections with the Soviet Union. It is the judgment of Her Majesty's Government that these political connections should be strengthened. That is also the view of large numbers of people in this country concerned with the commercial future of Britain. If the Opposition want to take another view, they had better make it clear.

Mrs. Thatcher: Is the right hon. Gentleman aware that what he does as Leader of the Labour Party in his desire to support tile invitation of his own Left is not a matter for us—

Mr. Heffer: Rubbish.

Mrs. Thatcher: —but that what he does as Prime Minister of Great Britain is a matter for us, and we totally condemn his decision to invite Mr. Ponomarev to see him and to receive him? Is he not aware of the propaganda use that will be made of this visit in every Iron Curtain country in the world? Does he not think it both a major diplomatic blunder and a particularly insensitive decision to receive Mr. Ponomarev during the week of the 20th anniversary of the Hungarian uprising?

The Prime Minister: The right hon. Lady is wrong in almost every particular, but if she is enunciating the doctrine—

Mr. Goodhew: My right hon. Friend speaks for Britain.

The Prime Minister: —that in the distant and probably never to be achieved circumstance in which she might occupy this Dispatch Box she never intends to meet a member of the Politburo, she had better make it clear now.

Mr. Greville Janner: Will my right hon. Friend accept that there are many of us here who think that the argument as to whether these people should be here is sterile, because they are here, and who believe that the occasion should be taken not to abuse them but to condemn


their abuse of minorities in the Soviet Union and, in particular, the imprisonment of Jewish people last week as a prelude to this visit?

The Prime Minister: The attitude that Her Majesty's Government have taken in relation to the matters raised by my hon. and learned Friend is well known. Both my predecessor and I have used opportunities available to us to make our attitude known on the questions that particularly concern my hon. Friend. We shall continue to do so. Frankly, the Opposition are making asses of themselves.

Mrs. Thatcher: Does the Prime Minister think that soft soothing words will have any effect whatsoever on that regime, especially in the week when he says to the whole British people that he is threatening to withdraw our only deterrent, which is the forces on the Rhine?

The Prime Minister: The right hon. Lady not only misrepresents what I said about that—[Interruption.] If the House is not careful, I shall read the lot, and then hon. Members will see what the position is. Not only does the right hon. Lady misrepresent what I said on that particular subject, but she misunderstands the other situation. The truth is that although the representations to the Soviet Union on these matters are best conducted privately, and certainly not against this kind of background, they have had an impact, as I think is known to both my hon. and learned Friend the Member for Leicester, West (Mr. Janner) and others, and we shall continue to make them in that way.

Mr. Greville Janner: Hear, hear.

Mr. Madden: Does the Prime Minister agree that sections of the Opposition, including the Leader of the Opposition, seem to be displaying, not for the first time, a high degree of hypocrisy on these matters?

Mr. Goodhew: The Race Relations Bill last night.

Mr. Madden: Judging by the comments of the Leader of the Opposition this afternoon, is this not inconsistent with the fact that an official Opposition spokesman on foreign affairs has recently

visited Russia? Does my right hon. Friend agree that the best way of making representations against a system that many of us on the Labour Benches abhor is by the legitimate use of protest and democratic objection to facets of Russian life that we detest?

The Prime Minister: I do not think that it is hypocrisy. I think that it is total and utter naivety.

Mr. Grimond: Does the Prime Minister agree that there are many people in Britain who feel that, whatever the Labour Party may do, it was a mistake on his part to receive this man and, further, that they see no reason for doing so? Does he really believe that this type of appeasing gesture and the refusal to take part in the ceremony at the Katyn Memorial do any good to us at all? There is no evidence that the Russians take the slightest notice of it, and I should have thought that it damaged those who look to us from behind the Iron Curtain.

The Prime Minister: The right hon. Gentleman has no experience of ministerial life at all. [HON. MEMBERS: "Cheap."] He is totally unaware of the way in which these matters take place. Of course leaders of the present Opposition have met members of the Presidium and the Politburo on many occasions, and I shall certainly continue to do so if I think it to the advantage of the people of Britain. The right hon. Gentleman is totally and absolutely mistaken.

Mr. Churchill: Has the Prime Minister forgotten the words of the late Aneurin Bevan when, in a memorandum to the national executive of the Prime Minister's own party, he said:
The Communist Party "—

Hon. Members: Reading.

Mr. Churchill: Yes, I am reading his words:
The Communist Party is the sworn"—

Mr. Speaker: Order. The hon. Gentleman had better speak from memory. He is not allowed to quote.

Mr. Churchill: Has the Prime Minister forgotten the words of Mr. Bevan when he said that the Communist Party was the sworn inveterate enemy of the


Socialist and Democratic Parties and only associated with them as a preparation for destroying them? Does he or does he not dissociate himself from that view?

The Prime Minister: I know the deep sincerity with which the hon. Gentleman holds his views and the occasions on which he has protested about meetings with Soviet leaders of this sort. I fully understand that. However, I am just as capable of looking after myself as he is. If quotations were in order, Mr. Speaker, I should have quoted exactly the comment of the hon. Gentleman in May 1975—

Mr. Maxwell-Hyslop: On a point of order, Mr. Speaker.

Mr. Speaker: Order. Could it not wait?

Mr. Maxwell-Hyslop: My point of order is that if it is out of order for my hon. Friend the Member for Stretford (Mr. Churchill) to read a quotation, it must be out of order for the Prime Minister to do so.

Mr. Speaker: Order. I was waiting. The Prime Minister had not started quoting. I was waiting to pounce.

The Prime Minister: So am I, Mr. Speaker. However, in view of the deep opposition, and its sincerity, to these discussions with Mr. Ponomarev, I should like to remind the House that when the hon. Member for Stretford (Mr. Churchill) in May 1975 had lunch—not even just met, but had lunch with, believe it or not—a senior adviser to Mr. Brezhnev, he said—[HON. MEMBERS: "Oh."] I should not like to read what he said, but I want to inform the House—[HON. MEMBERS: "Why not?"]. Because it would be out of order. The hon. Gentleman's opinion at the time was that it was very important that there should be contact with people such as a senior adviser—[HON. MEMBERS: "Reading."]—to Mr. Brezhnev in order that they might see how democracy functioned, because, frankly, we have to live with these people.

I do not admire the hon. Gentleman's consistency, but I envy him his cheek.

Mr. Ridley: On a point of order, Mr. Speaker. In view of the presence in the Chamber of a man who holds this free Parliament in contempt, I beg to move, That Strangers do withdraw.

Notice being taken that Strangers were present, Mr. SPEAKER, pursuant to Standing Order No. 115 (Withdrawal of Strangers front House), put forthwith the Question, That Strangers do withdraw:—

The House proceeded to a Division—

Mr. Greville Janner (seated and covered): On a point of order Mr. Speaker. In view of the fact that most hon. Members would wish these particular guests to see—

Mr. Speaker: Order. The hon. and learned Gentleman must have his head covered.

Mr. Janner: I am already covered, Mr. Speaker. I carry this tiny skull cap with me for such occasions. In view of the fact that most hon. Members, on reflection, would feel it right that the guests should see how the democratic process works and hear our protests at their behaviour, may I ask the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) to reconsider the matter?

Mr. Speaker: Order. That is not a point of order for me, as the hon. and learned Gentleman knows.

Mr. Gow (seated and covered): On a point of order, Mr. Speaker. As the strangers to whom my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) took objection have now left at the first sign of fury from my hon. Friend, it seems rather pointless to pass the motion. Would it not be appropriate on this occasion to call off the Division?

Mr. Speaker: I have no power to call off a Division.

The House having divided: Ayes 80, Noes 192.

Division No. 351.]
AYES
[3.31 p.m.


Adley, Robert
Boscawen, Hon Robert
Critchley, Julian


Alison, Michael
Bottomley, Peter
Dodsworth, Geoffrey


Baker, Kenneth
Brotherton, Michael
du Cann, Rt Hon Edward


Banks, Robert
Brown, Sir Edward (Bath)
Dykes, Hugh


Bell, Ronald
Churchill, W. S.
Eden, Rt Hon Sir John


Bennett, Sir Frederic (Torbay)
Clark, Alan (Plymouth, Sutton)
Elliott, Sir William


Benyon, W.
Clegg, Walter
Eyre, Reginald


Biggs-Davison, John
Cope, John
Fairgrieve, Russell




Farr, John
Kilfedder, James
Roberts, Michael (Cardiff NW)


Fell, Anthony
King, Tom (Bridgwater)
Rost, Peter (SE Derbyshire)


Finsberg, Geoffrey
Knight, Mrs Jill
Shepherd, Colin


Fookes, Miss Janet
Lamont, Norman
Spence, John


Freud, Clement
Lloyd, Ian
Spicer, Michael (S Worcester)


Fry, Peter
McAdden, Sir Stephen
Steen, Anthony (Wavertree)


Goodhart, Philip
McCrindle, Robert
Stewart, Ian (Hitchin)


Griffiths, Eldon
Madel, David
Taylor, Teddy (Cathcart)


Grimond, Rt Hon J.
Mawby, Ray
Tebbit, Norman


Grist, Ian
Maxwell-Hyslop, Robin
Thorpe, Rt Hon Jeremy (N Devon)


Grylls, Michael
Moate, Roger
Townsend, Cyril D.


Hall, Sir John
Morgan, Geraint
Wall, Patrick


Hamilton, Michael (Salisbury)
Morgan-Giles, Rear-Admiral
Walters, Dennis


Hannam, John
Mudd, David
Wells, John


Hastings, Stephen
Onslow, Cranley
Wiggln, Jerry


Hayhoe, Barney
Page, John (Harrow West)
Young, Sir G. (Ealing, Acton)


Hicks, Robert
Page, Rt Hon R. Graham (Crosby)



Holland, Philip
Paisley, Rev Ian
TELLERS FOR THE AYES:


Jessel, Toby
Rathbone, Tim
Mr. Michael Latham and


Kershaw, Anthony
Rees-Davies, W. R.
Mr. Nicholas Ridley.




NOES


Abse, Leo
Fitt, Gerard (Belfast W)
Maynard, Miss Joan


Allaun, Frank
Flannery, Martin
Mellish, Rt Hon Robert


Anderson, Donald
Fletcher, L. R. (Ilkeston)
Mikardo, Ian


Archer, Peter
Fletcher, Ted (Darlington)
Millan, Rt Hon Bruce


Armstrong, Ernest
Ford, Ben
Moonman, Eric


Ashley, Jack
Forrester, John
Morris, Charles R. (Openshaw)


Ashton, Joe
Garrett, John (Norwich S)
Newens, Stanley


Atkins, Ronald (Preston N)
George, Bruce
Oakes, Gordon


Bagier, Gordon A. T.
Gilbert, Dr John
O'Halloran, Michael


Barnett, Guy (Greenwich)
Gould, Bryan
Orme, Rt Hon Stanley


Barnett, Rt Hon Joel (Heywood)
Gourlay, Harry
Owen, Rt Hon Dr David


Benn, Rt Hon Anthony Wedgwood
Graham, Ted
Park, George


Bennett, Andrew (Stockport N)
Grant, John (Islington C)
Parker, John


Bishop, E. S.
Hamilton, James (Bothwell)
Parry, Robert


Blenkinsop, Arthur
Hamilton, W. W. (Central Fife)
Pavitt, Laurie


Booth, Rt Hon Albert
Hardy, Peter
Perry, Ernest


Bottomley, Rt Hon Arthur
Harrison, Walter (Wakefield)
Powell, Rt Hon J. Enoch


Boyden, James (Bish Auck)
Hatton, Frank
Price, C. (Lewisham W)


Bray, Dr Jeremy
Heffer, Eric S.
Price, William (Rugby)


Brown, Hugh D. (Provan)
Hooley, Frank
Radice, Giles


Brown, Robert C. (Newcastle W)
Hooson, Emlyn
Rees, Rt Hon Merlyn (Leeds S)


Buchanan, Richard
Horam, John
Roberts, Albert (Normanton)


Callaghan, Rt Hon J. (Cardiff SE)
Huckfield, Les
Robinson, Geoffrey


Callaghan, Jim (Middleton &amp; P)
Hughes, Rt Hon C. (Anglesey)
Rodgers George (Chorley)


Campbell, Ian
Hughes, Mark (Durham)
Rodgers, Rt Hon William (Stockton)


Canavan, Dennis
Hughes, Robert (Aberdeen N)
Rooker, J. W.


Cant, R. B.
Hughes, Roy (Newport)
Roper, John


Carmichael, Neil
Hunter, Adam
Ross, Stephen (Isle of Wight)


Carter, Ray
Irvine, Rt Hon Sir A. (Edge Hill)
Ross, Rt Hon W. (Kilmarnock)


Cartwright, John
Jackson, Miss Margaret (Lincoln)
Rowlands, Ted


Clemitson, Ivor
Janner, Greville
Sandelson, Neville


Cocks, Rt Hon Michael (Bristol S)
Jay, Rt Hon Douglas
Sedgemore, Brian


Cohen, Stanley
John, Brynmor
Selby, Harry


Concannon, J. D.
Johnson, Waller (Derby S)
Shaw, Arnold (Ilford South)


Conlan, Bernard
Johnston, Russell (Inverness)
Sheldon, Robert (Ashton-u-Lyne)


Corbett, Robin
Jones, Dan (Burnley)
Short, Mrs Renée (Wolv NE)


Cox, Thomas (Tooting)
Kaufman, Gerald
Silkin, Rt Hon John (Deptford)


Craigen, J. M. (Maryhill)
Kilroy-Silk, Robert
Silverman, Julius


Crawshaw, Richard
Lamborn, Harry
Skinner, Dennis


Crowther, Stan (Rotherham)
Lamond, James
Smith, John (N Lanarkshire)


Cryer, Bob
Latham, Arthur (Paddington)
Spearing, Nigel


Cunningham, G. (Islington S)
Lestor, Miss Joan (Eton &amp; Slough)
Spriggs, Leslie


Davidson, Arthur
Lewis, Arthur (Newnam N)
Stewart, Rt Hon M. (Fulham)


Davies, Bryan (Enfield N)
Lipton, Marcus
Stoddart, David


Davies, Denzil (Llanelli)
Litterick, Tom
Stott, Roger


Davies, Ifor (Gower)
Loyden, Eddie
Strang, Gavin


Davis, Clinton (Hackney C)
Luard, Evan
Strauss, Rt Hon G. R.


Dean, Joseph (Leeds West)
Lyon, Alexander (York)
Summerskill, Hon Dr Shirley


Dempsey, James
McCartney, Hugh
Taylor, Mrs Ann (Bolton W)


Doig, Peter
McElhone, Frank
Thomas, Ron (Bristol NW)


Dormand, J. D.
MacFarquhar, Roderick
Thorne, Stan (Preston South)


Duffy, A. E. P.
McGuire, Michael (Ince)
Tinn, James


Dunn, James A.
MacKenzie, Gregor
Torney, Tom


Eadie, Alex
Maclennan, Robert
Urwin, T. W.


Edge, Geoff
McMillan, Tom (Glasgow C)
Walden, Brian (B'ham, L'dyw'd)


Edwards, Robert (Wolv SE)
McNamara, Kevin
Walker, Terry (Kingswood)


Ellis, John (Brigg &amp; Scun)
Madden, Max
Watkins, David


Evans, Fred (Caerphilly)
Mahon, Simon
Watkinson, John


Evans, Ioan (Aberdare)
Mallalieu, J. P. W.
Weetch, Ken


Ewing, Harry (Stirling)
Marshall, Dr Edmund (Goole)
Weitzman, David


Faulds, Andrew
Marshall, Jim (Leicester S)
White, Frank R. (Bury)


Fitch, Alan (Wigan)
Mason, Rt Hon Roy
White, James (Pollock)




Williams, Rt Hon Shirley (Hertford)
Wilson, Rt Hon Sir Harold (Huyton)
TELLERS FOR THE NOES:


Williams, Sir Thomas (Warrington)
Woof, Robert
Mr. A. W. Stallard and


Wilson, Alexander (Hamilton)
Wrigglesworth, Ian
Mr. Alf Bates.

Question accordingly negatived.

The Prime Minister: No war with Russia anyway!

BUSINESS OF THE HOUSE

Mrs. Thatcher: May I ask the Home Secretary to give the business of the House for next week, please?

The Secretary of State for the Home Department (Mr. Merlyn Rees): The business for next week will be as follows:

MONDAY 1ST NOVEMBER—Motion to appoint a Select Committee to investigate allegations against Members of Parliament.

Remaining stages of the Development of Rural Wales Bill [Lords].

And, if there is time, a debate on Welsh affairs.

TUESDAY 2ND NOVEMBER—Remaining stages of the Weights and Measures &c. (No. 2) Bill [Lords].

Consideration of Lords amendments to the New Towns (Amendment) Bill, and to the Bail Bill [Lords].

Motions relating to Poultry Meat (Hygiene) Regulations.

WEDNESDAY 3RD NOVEMBER—Remaining stages of the Retirement of Teachers (Scotland) Bill [Lords] and of the Valuation and Rating (Exempted Classes) (Scotland) Bill [Lords].

Consideration of Lords amendments to the Licensing (Scotland) Bill.

Remaining stages of the Sexual Offences (Scotland) Bill, which is a consolidation measure.

THURSDAY 4TH NOVEMBER—A debate on Transport Policy.

Proceedings on the Supplementary Benefits Bill [Lords] and remaining stages of the Land Drainage Bill [Lords] which are consolidation measures.

FRIDAY 5TH NOVEMBER—Resumed debate on Welsh affairs.

MONDAY 8TH NOVEMBER—Consideration of Lords amendments which may be received.

The House will wish to know that Her Majesty the Queen has agreed to open the next Session of Parliament not on Wednesday 17th but on Wednesday 24th November.

Mrs. Thatcher: May I put two points to the right hon. Gentleman? First, in regard to Monday's business, will the Home Secretary undertake to table today the motion to appoint the Select Committee? Since the motion is in the Table Office and in the possession of the House, may hon. Members have copies of it today? Secondly, will he arrange to have a debate as soon as possible on our commitments to NATO, particularly our commitment to the Army of the Rhine?

Mr. Rees: In reply to the right hon. Lady's second point, if the other place is helpful—and perhaps the right hon. Lady can help in that respect—I may be able to find time for such a debate.
With regard to the motion setting up the Select Committee, the right hon. Lady knows that we have discussed this matter through the usual channels. I propose to make the motion available to the House. If a copy of the motion is posted outside the Whips' Office, hon. Members may be made aware of it in that way before it is actually in print tomorrow. I shall do what I can to assist the House.

Mr. Thorpe: Will the right hon. Gentleman ensure that the Minister of Agriculture will make a statement early next week on his talks in Brussels on the subject of the green pound? Secondly, in regard to Monday's business, is it not a little rough on the Welsh that Welsh affairs will be discussed on Monday only if there is time left at the end of that sitting and that, if that does not happen, the debate will take place on Friday? Could not the House be given a whole day to discuss Welsh affairs?

Mr. Rees: In reply to the right hon. Gentleman's first point, I shall discuss the matter of the green pound with my right hon. Friend the Minister of Agriculture.
There is a problem in regard to the debate on Welsh affairs. I wanted to have such a debate on Monday, but it is


important that the motion on the allegations against Members of Parliament should be discussed and, if necessary, voted upon. I had hoped that there might be time at the end of that debate on Monday to discuss Welsh affairs, but let us see what happens. I am doing my best by giving Friday to Welsh Members.

Mr. Alexander W. Lyon: When will the right hon. Gentleman table a change in the Standing Orders to allow proxy voting for sick Members on occasions involving a three-line Whip?

Mr. Rees: I understand that discussions are taking place on this matter. It is an important issue, and I know that my hon. Friend the Member for York (Mr. Lyon) suffered from that situation some months ago. We are examining the matter.

Sir Frederic Bennett: The right hon. Gentleman will be aware—particularly now—of the presence on the Order Paper of several motions, signed by a number of Members of Parliament from all parts of the House, drawing attention to the presence here of unwelcome visitors. In view of the strong representations made to him, may we debate the matter next week?

[That this House deplores the decision of the Labour Party to extend an official invitation to visit Great Britain to Mr. Boris Ponomarev, the senior member of the Central Committee of the Communist Party of the USSR charged with furthering the interests of Soviet imperalism in countries outside the Eastern Bloc; and calls on the Prime Minister and the Foreign Secretary to dissociate the British Government from this visit.]

[That this House deplores the choice of Boris Ponomarev as head of the Delegation from the Institute of International Relations of the Soviet Academy of Science, which was invited by the National Executive Committee of the Labour Party, since as a close associate of Stalin, Mr. Ponomarev was responsible for the imprisonment and massacre of thousands of innocent people, including the extermination of a large number of Jewish intellectuals and his plan to liquidate the Soviet Jewish minority still continues despite the Helsinki Agreement; and believes that since Mr. Ponomarev was involved in planning

the invasion of Hungary and Czechoslovakia, his presence on this Delegation may give the impression that the British people condone these inhuman actions.]

[That this House, while emphatically wishing no improper behaviour, let alone personal harm, towards Mr. Boris Ponomarev during his trip to Great Britain, and looking forward to his speedy and safe return home, reminds the National Executive Committee of the Labour Party of the vigorous reaction of the working men of Barclay and Perkins Ltd. in 1850 to the presence of another unwelcome foreign visitor with blood on his hands, General J. J. Von Haynau; and recalls that the then Foreign Secretary Lord Palmerston, described the General's visit as showing a "want of propriety" in that he had come to a country where he was regarded as "a moral criminal".]

[That this House deplores the invitation by the National Executive of the Labour Party to the Soviet tyrant, Boris Ponomarev, to visit this country whose freedom he is charged with destroying; and urges the Prime Minister and all Members of the Cabinet who represent the British people to desist from meeting so implacid an enemy in their name.]

Mr. Rees: We have already gone over these matters. In politics we all have to talk with people whose views we do not necessarily share, and in international affairs that is even more the case. I shall not be able to find time for such a debate. A demonstration has been made.

Mr. Michael McGuire: Is the Home Secretary aware that many Labour Members, and I am sure many Opposition Members, too, would like at the earliest opportunity to debate the problems of the textile industry, and would particularly like a Government statement envisaging examination of investment grants in special development areas, with a particular view to examining whether there is any abuse in the spending of public money? I wish particularly to draw attention to the sad closure of the Courtauld factory at Skelmersdale, which will make my constituency a desert of unemployment?

Mr. Rees: We are all concerned about what is happening at Skelmersdale. I shall have a word with my right hon.


Friend the Secretary of State for Employment. I have a problem because of pressure of time, but certainly I agree that the problems of the textile industry are real ones, and I shall do what I can to assist my hon. Friend.

Mr. John Davies: On the subject of the textile industry, which is a matter of great concern to us all, the Home Secretary will be aware that the Select Committee on European Secondary Legislation recommended a series of draft directives for discussion in this House within the framework of a major debate on textiles. The House as a whole would be served by early consideration of the need for such a debate in the light of plans in Europe and the troubled state of the United Kingdom textile industry.

Mr. Rees: I shall certainly examine that matter. I repeat that there is a problem involving pressure of time, and perhaps the right hon. Member for Knutsford (Mr. Davies) will use his influence.

Mr. Henderson: Will the right hon. Gentleman say whether the new day allocated to the opening of the new parliamentary Session will prejudice the Government's legislative programme? Is he aware that yesterday, as reported in Hansard at col. 473, his right hon. Friend the Minister of State for Foreign and Commonwealth Affairs said that there would be legislation to enable the introduction of a 200-mile fishery limit by 1st January? What effect will that have on the devolution Bill?

Mr. Rees: With regard to fishing limits, I sometimes feel that my right hon. Friend the Foreign Secretary thinks of nothing else but fish. I can assure the hon. Gentleman that steps will be taken on that matter. As to the legislation on devolution, the Government have already given their commitment, which I repeat.

Mr. Flannery: In view of the intractable and terrible problems of the people of Northern Ireland, will my right hon. Friend—who, I am sure, knows more about this than practically anybody—seriously consider setting time aside for a full-scale debate on the problems of Northern Ireland?

Mr. Rees: I wish I could, but my hon. Friend realises the problem of time. I

wish we could make more arrangements for right hon. and hon. Members to visit Northern Ireland. It is one way in which they can learn of the particular problems of a part of the United Kingdom. I realise the nature of the problem, but I cannot promise anything.

Mr. Hooson: Do the Government intend to put a time limit on the debate on Monday next on the setting up of the Select Committee concerning the allegations about Members of Parliament? Further, is it the intention of the Government not only to put down a motion setting up the Select Committee but also to deal with its procedure and powers?

Mr. Rees: With regard to the hon. and learned Gentleman's first question, I will check on that. I do not know the answer. I had assumed that the debate would finish at about 10 o'clock, but I am open to advice on that.
As to the question of procedure and powers, perhaps the hon. and learned Gentleman will wait to see what is in the motion, on which I have spent a great deal of time.

Mr. Eldon Griffiths: Will the right hon. Gentleman be a little more specific about providing time for a debate on the British Army of the Rhine? Is he aware that there is very grave anxiety at home, as well as overseas, about the implied threats that the Prime Minister made as to the possible withdrawal of British troops?
Is the right hon. Gentleman also aware that it is urgent that the opportunity be taken to remove the uncertainties which have been created by the Prime Minister's remarks—particularly in view of his childish comment when leaving the Chamber that there will not now be a war with Russia?

Mr. Rees: With regard to the British Army of the Rhine, I think it right that it should be made clear from this House to Europe that we have a firm commitment there, and that the British Army of the Rhine and the Air Force perform a most important function there. But, in our different economic situation, it is as well to remind Europe that being in Europe costs us money that other countries do not have to spend.

Mr. Ron Thomas: Will my right hon. Friend give us a categorical assurance


that the Government intend to get through the business that the House of Lords is now attempting to mutilate? Many of us are concerned that fixing the date at 24th November seems to suggest that there is a time limit. We would much rather have an open-ended commitment that we intend to get our business through Parliament.

Mr. Rees: If it were to be open ended, other major problems would arise. Our commitment to our legislation is clear. Now that the perhaps legitimate complaint of the House of Lords about business piling up on it is removed, I hope that it will isolate the other problem that we see on our side, namely, that the House of Lords seems to be interested in holding up legislation only when there is a Labour Government and never exercises this function when there is a Conservative Government.

Mr. Maxwell-Hyslop: As last time there was an unwelcome Russian visitor the then Labour Government endeavoured to placate the Russian Government by handing over the total State gold reserves of the sovereign independent republics of Estonia, Latvia and Lithuania—which had been deposited with the Bank of England for safe keeping against the eventuality of these countries being invaded by Soviet Russia—do not the Government's threats to withdraw the British Army of the Rhine, coincident with another Russian visit to this country—[Interruption.]—suggest that the business for this coming week will once again include an attempt by a Labour Government to placate this country's enemies?

Mr. Rees: There is no question of placating. The hon. Gentleman will, if he reflects on it, realise that he has joined together events which are not connected.

Mr. Skinner: As my right hon. Friend is aware that many of us are not very happy about the decision not to have a tribunal of inquiry into the allegations against Members of Parliament, will he give a guarantee—despite his reply to the hon. and learned Member for Montgomery (Mr. Hooson)—that the Select Committee will be dealing with this matter in public? 
Will my right hon. Friend also give a guarantee that the terms of reference will go wider than the points made in the Observer article and cover the whole range of allegations against Members of Parliament in relation to corruption generally?

Mr. Rees: I think it would be better if my hon. Friend waited to see the motion which will be on the Order Paper. It is a difficult topic, but we shall see how satisfied the House will be. There will be a chance to debate it on Monday.

Mr. Blaker: Did not the Leader of the House give an undertaking that there would he a debate on foreign affairs before the end of the Session? If that undertaking is to be honoured, as I hope it will, will not that give the House an opportunity to debate the visit of Mr. Ponomarev?

Mr. Rees: I am aware of the undertaking. We shall have to see with what speed legislation comes back from the House of Lords. I realise the need, but I have not a great deal of time. I shall do what I can.

Mr. Heffer: Will my right hon. Friend consider giving time for a debate—not necessarily on the Floor of the House, if that is not possible, but in the Regional Affairs Committee—on the problems of the North-West, and particularly of Merseyside, especially in view of the recent proposal by Courtaulds Limited to close down three factories in that area?

Mr. Rees: I will certainly give that favourable consideration.

Mr. Peyton: May I ask the right hon. Gentleman several questions? First, will he not accept that it would be quite intolerable if, for the second year running, the debate on Welsh affairs were to be split into two—started at a late hour on Monday and finished off at the fag end of the debate on Friday? It is a miserable way of treating a very important subject. I am sure that the right hon. Gentleman will be the first to agree, on reflection, that that is the case.
Secondly, will the right hon. Gentleman give a favourable response to the question from my hon. Friend the Member for Blackpool, South (Mr. Blaker)? I


bear in mind that the right hon. Gentleman has not had much time to give undertakings on this subject, but the Leader of the House has most certainly given very firm undertakings about having a foreign affairs debate before the end of the Session.
We are all still longing to hear in a debate as soon as possible the subjects of glut and insufficiency brought together by the Minister responsible for water.
Lastly, will the right hon. Gentleman refrain from following the quite unworthy examples of stoking up fires of indignation against the House of Lords when it has only been attempting to ensure that unpopular and unacceptable legislation is at least scrutinised?

Mr. Rees: With regard to the last point, it strikes some of us on the Government side that in the days of the last Conservative Administration, when money supply was being built up, and when EEC legislation was being passed, there was not a word from the House of Lords. That is what exercises us on the Government side. In our view, Conservative Governments put through poor legislation as much as we do. [Interruption.] If that is thought to be funny, and the Opposition think that, in terms of legislation and putting it right, there is no need for a revising Chamber, we shall take it into account. Of course, legislation goes through this House and there is a need, under the present arrangements, to look at it again. There are ways of attending to that without a House of Lords, of course. But the point is that Conservative legislation is never touched. I hope that the right hon. Gentleman will reflect on that.
With regard to Welsh affairs, I do not see us having a split debate. I have no feel for how long the debate will take place on Monday. If it seems to be going on, we shall deal with the Bill but not with Welsh affairs. I thought that I was being generous to the land of my birth by setting aside Friday with no other work on that day.
With regard to a debate on foreign affairs, I will do what I can depending on how the Bills come back from the Lords. With regard to water, I hope that there will be a statement next week.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. I propose to take two more questions from each side of the House.

Mr. Mellish: Will my right hon. Friend think again about whether there should be a debate on foreign affairs before the end of the Session? The time is now coming when the people of Britain will want to know where the Conservative Party stand on their relationship with Russia. The people of Britain will certainly want to know, in view of the noises which have been made not only by the Leader of the Opposition but also by the vote which took place today, whether, in voting for the Conservative Party they may well be voting for war with Russia.

Mr. Tebbit: May I suggest to the right hon. Gentleman that he could ease a number of problems with regard to legislation, particularly that coming from the Lords, if he could persuade some of the Labour peers—particularly some of the recently created Labour peers—to turn up and vote for the Government as opposed to voting with the Opposition? If the right hon. Gentleman would do that, it would perhaps delay, allowing proper discussion, the return of some of those Bills. We would then have next Monday week free, when we could discuss either foreign affairs, and the unfortunate threat to the presence of British troops in Germany, or economic affairs. Perhaps the right hon. Gentleman would also be able to say by how much the pound has to fall further before we get another debate on the fall in sterling.

Mr. Rees: With regard to the numbers in the Lords, the hon. Gentleman gives me a bright idea. Perhaps we do not have enough peers in the Lords to deal with the matter. With regard to the Bills in the Lords—particularly the Bill on shipbuilding, without which there will be a severe problem for the shipbuilding industry which exercises Clydeside and Wearside—it is important that we get them through.

Mr. Corbett: In view of the serious threat to the continued existence of the Observer newspaper, and some 100 jobs, could my right hon. Friend find time next week, or before we start the new Session,


for a debate on the interim report of the Royal Commission on the Press?

Mr. Rees: I must confess that with the amount of business we have we shall not have time for this, although it is an important issue. I cannot promise that. I do not know whether there are any other means by which this problem can be raised.

Rear-Admiral Morgan-Giles: Will the right hon. Gentleman try to arrange a statement by the Home Secretary on the subject of police pay, police recruitment and police conditions and also upon firearms certificates?

Mr. Rees: Recruitment is going up much higher than it has been. The police had a 30 per cent. pay increase a year ago. While I realise the long-term problem about police pay, I think that in the short term, given the pay policy, the police have done very well.

Rear-Admiral Morgan-Giles: On a point of order, Mr. Speaker. I asked the right hon. Gentleman for a debate and not for a statement now.

Mr. Rees: Further to that point of order, Mr. Speaker. Having made those remarks, I do not think there is time for a debate now.

Mr. Onslow: On a point of order, Mr. Speaker. In his answer to my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) about a debate on the Government's commitment to NATO, and to my right hon. Friend the Leader of the Opposition, the acting Leader of the House suggested that our ability to debate this matter was in some way dependent upon what the other place might do. Would he not agree that this is a House of Commons matter and may we not have a debate?

Mr. Speaker: Order. It does not matter what the right hon. Gentleman agrees on a point of order. That is my business.

PETITIONS

Mr. Hastings: On a point of order, Mr. Speaker. I wanted to ask your advice about Standing Order No. 100 concerning petitions. It happens that I have a petition, duly signed, protesting

against the decision of the Government to receive Mr. Ponomaryov. I should like to know whether I should read it to the House now or at another time.

Mr. Speaker: There is a time set down. I congratulate the hon. Gentleman on making his point, but I think he knows when to present a petition.

STATUTORY INSTRUMENTS (MR. SPEAKER'S RULING)

Mr. Speaker: I will now rule on the submissions made to me yesterday arising from the proceedings in the First Standing Committee on Statutory Instruments.
The procedure with regard to Statutory Instruments referred to Standing Committees is governed by Standing Order No. 73A. Paragraph (4) of that Order required the Standing Committee to consider an instrument referred to it on a motion,
That the Committee has considered the Instrument.
That motion has to be decided at a prescribed time—in this case, after one-and-a-half hours—whereupon the Committee is required to report the Instrument to the House, irrespective of the outcome of any Division on the motion in the Committee.
It is not, of course, for me to comment on the proceedings in the Committee. Nor would it be proper for me to express any view on the status in law of the Instruments affected. I am concerned only at the point at which the Instrument is reported back to the House. Further proceedings in the House are prescribed by paragraph (5) of the Standing Order, which provides that, in the event of a motion being made in the House relating to the Instrument—and the forms of such motions are laid down in paragraph (3) of the Order—Mr. Speaker shall put the question thereon forthwith. That is the answer to the question put to me by the hon. Member for Gainsborough (Mr. Kimball).
I may say, for the House's information, that the present case is not unprecedented. Whether the House considers that the time has yet arrived to review the working of this relatively new procedure is not a matter for me.

Mr. Kimball: I am grateful to you, Mr. Speaker, for that ruling. Would it now be in order for me to ask the Leader of the House whether, after what you have said, we shall have an opportunity next week to have a Division on this issue?
I realise from what you said that it cannot be debated, but we can have a Division on the issue. I hope that in view of what you have said the whole House will recognise the difficulty in which this Standing Order places us. I hope that the appropriate people will look sympathetically at this case so that, instead of having a cold-blooded Division, we can at least have a debate before we take such a decision. As this matter affects all sides of the House, I would hope that we shall be able to have a free vote.

The Secretary of State for the Home Department (Mr. Merlyn Rees): Further to that point of order, Mr. Speaker. I cannot provide time for a debate, but I am happy to allow a vote so that the House can give its views on the matter. But speaking with another hat on, I cannot go on subsidising these licences.

Mr. Spearing: Further to that point of order, Mr. Speaker. You referred to the procedure under Standing Order 73A as being of relatively recent date. It is that very paragraph which has caused difficulties in other directions, since under Standing Order 73A, as you described, it is possible for a Committee to debate a matter but to come to virtually no conclusion. In view of the dissatisfaction which has been expressed about this procedure, and despite the lack of opportunities for debate and the difficulty which has arisen in the last two days, may I ask whether the Leader of the House will consider referring the working of this Standing Order to the Committee on Procedure?

Mr. Speaker: Order. We must not get into the habit of using points of order to question the acting Leader of the House. The right hon. Gentleman will have heard what the hon. Gentleman said, as I did.

Mr. Wiggin: On a point of order, Mr. Speaker. If I may say so, it is not a very satisfactory conclusion because clearly the Division yesterday morning upstairs expressed an opinion. Now we are told that, despite that vote, and despite the quite clear statement of my hon. Friend the Member for Gainsborough (Mr. Kimball) that there would be an opportunity for the Government to deal with this matter before the end of this Session without incurring additional public expenditure, we are left with a situation where, having voted and indicated our views, in a democratic way, nothing further is to be done. Surely this matter should be referred to the Committee on Procedure.

Mr. Speaker: I quite understand the hon. Gentleman's feeling, but all that I can do and what I must do is interpret the rules of the House as I understand them.

Mr. Ridley: Mr. Ridley rose—

Mr. Speaker: I hope that we shall not continue this for long.

Mr. Ridley: Further to that point of order, Mr. Speaker. It is meaningless to ask hon. Members to spend a morning in Committee when the votes which they cast at the end of the morning have no effect. This is an all-party matter now. It seems generally agreed that this should be referred to the Committee on Procedure.

Mr. Speaker: I have no doubt that this, along with other difficulties which have arisen recently, will be considered by the appropriate Committee. I hope that they will be.

Orders of the Day — INDUSTRY (AMENDMENT) BILL

As amended (in the Standing Committee), considered.

Orders of the Day — Clause 1

INCREASE IN LIMIT ON SECRETARY OF STATE'S FINANCIAL ASSISTANCE TO INDUSTRY

4.11 p.m.

Mr. Michael Grylls: I beg to move Amendment No. 4, in page 1, line 10, at end insert—
'Provided that the Secretary of State shall not use any of the money authorised by this Act for the purposes of giving financial assistance in pursuance of directions under section 3 of the Industry Act 1975 to any company in which any of the shares are owned by the National Enterprise Board, and'.
The Opposition believe this amendment to be one of the most crucial to this unwise, very small Bill. This legislation is a way by which the Government can siphon more funds into the National Enterprise Board with very scant parliamentary procedure. We believe that if the NEB is to have money, and it has been allocated its own money of £1,000 million, that should be the limit. However, this Section 3 procedure of the 1975 Industry Act allows the Secretary of State to make a direction that the NEB shall operate the Section 8 procedure of the 1972 Act. We do not believe that that is right.
It will not be news to the Government that the Opposition do not like the NEB very much. We do not hide out views about that. But we dislike this procedure even more, because under it the amount of money that the NEB has may be increased to almost double.
On 7th August we had the first occasion on which this procedure was used. The Secretary of State allocated £30 million to Leyland under the Section 3 procedure. We all knew that an additional £70 million would be allocated out of the NEB's own funds. In that debate I asked the Minister of State why he was not asking the NEB to use £100

million of its own money, which it still had, and why the NEB was prepared to use only £70 million of its own money for Leyland and to have £30 million directed from the Secretary of State.
That seemed to be a common sense and reasonable point to make. The Government were enthusiastic about Leyland. The Minister could have replied that perhaps our suggestion would be better. Indeed, he almost said that. In the closing minutes of the debate he said that there was a case for all the money coming from the NEB. Why did not he arrange it?
When we discussed the 1975 Industry Bill in Committee and on the Floor of the House, we were never told why there was this short-circuiting procedure with Industry Act money being forcibly fed through the NEB to NEB-owned companies. During many hours of debate on the Industry Bill, we had no answer to that question and on the first occasion when it was triggered off, on 3rd August, the Minister gave us no answer.
4.15 p.m.
I can only assume that this sort of procedure is a hangover from the days when the former Secretary of State was winging his way round industry trying to take over this and that, and the 1975 Industry Act was the horse on which he was to ride to achieve those aims. We thought that those days had ended. We have a new Secretary of State and a helpful and amiable Minister of State. On this question I must ask the Minister of State to give us a clear answer. Why does he need to have the Section 3 procedure? In these difficult days, if we are to increase the amount of money under the Industry Act and its Section 8 procedures by nearly two and half times, we are entitled to ask the question even more strongly.
Returning to the Leyland situation, one can imagine the scenario at a NEB meeting. A progress report on Leyland had been published by the NEB, It tried to pretend that all was going fairly well and, therefore, that it was safe to allow Leyland to have £100 million to go ahead with its development.
Having this proposition put up to it, the NEB thought that it had to approve it because the Government wanted the money to go to Leyland and were committed up to the hilt to allowing Leyland


to have this money in order to carry on. But the NEB was not sure what kind of return it would get on its money and, naturally, at the end of the year it wanted to show on its balance sheet that it had made a decent profit. As a result, it felt justified in deciding to give Leyland just a portion of what it required and to ask the Government for a Section 3 direction for the balance of the money.
Is this procedure an excuse to use money for non-viable projects? That is the suspicion of the Opposition. We are told at the same time that the NEB will monitor the result of its investment. But is it really feasible for the NEB to be asked to monitor that in which it does not apparently believe? If the NEB is a super holding Government investment company and if it approves investment for Leyland, let it use its own money and explain to the public what has been the return on that money and what monitoring it has done. The NEB is to be asked to monitor an investment three-tenths of which it does not believe in, and we regard that as being quite wrong.
The proposal has one further bad facet in the view of the Opposition: it removes further from Parliament control over this public money. As hon. Members will have discovered when attempting to put questions to the NEB, it is a difficult animal from which to get information. An hon. Member can put down Questions, but the Table Office does not quite know whether they should be allowed.
Even when Questions are answered by the Minister, he merely says that these are matters for the NEB. If an hon. Member writes to he NEB, occasionally it helps him. But that is not proper parliamentary control. If Parliament has allowed the NEB certain money, it should use that money. It should get on with it and use that money for its own subsidiary companies and its own projects. There should not be other money filtered in. That is the wrong way to do it, and it removes parliamentary control further from this House.
The Minister of State will remember that when we debated the matter on 3rd August there were many directors and others from British Leyland present in the Gallery. I hope that it is not improper to say this, but after the debate some

of those Leyland moguls were horrified by the scantiness of attendance at our debate. The matter was discussed for an hour and a half late at night. We were discussing a gigantic sum of money which a couple of decades ago would have represented the total National Debt.
I cannot believe that it is very satisfactory for the people v/ho run. administer and work in the National Enterprise Board itself. Although I can give no grounds for my fears, f suspect that the NEB itself would probably rather have this its own way. Then it would be in a position to say that it believes that Leyland justifies not the maximum of £100 million, but slightly less. In this case it believed that it justified £70 million and that £30 million should be forcibly fed in by the Government.
We believe the amendment to be important. It is even more important because of the amounts involved in the Bill. I hope that, in view of what the Minister of State said on 3rd August, when he certainly did not say that he was wedded to this proposal—he gave me the impression that he thought that I had made a fair point, that all the money should come from the NEB—in his heart of hearts he will see that this direction procedure is not the right way to proceed. If the Government's industrial policy is to back winners and put public money only into viable enterprises, this trigger mechanism of the Secretary of State giving directions is unnecessary.

Mr. Richard Wainwright: First, on behalf of the Liberal Bench, I would welcome the hon. Member for Keighley (Mr. Cryer) to his Front Bench position on the first occasion on which he has been partly responsible for piloting legislation. We on this Bench will naturally watch with concern lest his change of place in the Chamber is accompanied by any loss of conviction or any diminution of pungency in the way in which he customarily expresses those convictions.
Liberal Members are not surprised, but we do regret, that this amendment should be treated, apparently, judging from the speech of the hon. Member for Surrey, North-West (Mr. Grylls), as an occasion for outright attack on the National Enterprise Board. Let me make it clear once


again that the Liberal Party believes that there is a role for such a board. Indeed, without wearying the House with a lot of history, I can say in one sentence that it is almost 50 years since the Liberal Party, advised by Lord Keynes, Sir Walter Layton and others, advocated a national investment board as a major instrument of Government policy.
However, what our predecessors had in mind then, and what, broadly speaking, we have in mind now with the NEB, is a body which most emphatically will not be saddled by the Government with lame ducks of any character for political reasons. Our image of the NEB is a body with formidable powers and as much independence as possible from day-today hurly-burly politics, which will make it its job to step in where, unfortunately, for various reasons, private enterprise seems to have failed, to pick up new technologies, develop new processes, make the best use of new discoveries, and so on.
In order to achieve that rôle, it is extremely important that the NEB should be deliberately protected from the awesome responsibility of being landed by a Secretary of State's direction with lame ducks, which, of course, have already landed with the most frightful thud on the plate of the present NEB. It is simply in order to preserve what we believe should be the concept of a National Enterprise Board—namely, that the emphasis should be entirely on the enterprise—that we are inclined to support the amendment.
But in so doing, we do not join in wholesale condemnation of the idea of a National Enterprise Board. Nor are we so far entirely without hope that some adjustment of the Industry Act 1975 by a future Government might make the NEB of genuine utility to the country. In that spirit, but in that spirit only, we intend to support the amendment.

The Under-Secretary of State for Industry (Mr. Bob Cryer): I would first thank the hon. Member for Colne Valley (Mr. Wainwright) for his kind remarks about my metamorphosis and my appearance at this hallowed Dispatch Box.
I would make it clear immediately that we intend to call upon the House to resist the amendment, which we think will be of no advantage to the National

Enterprise Board or the Secretary of State.
The amendment would mean that Section 8 assistance could not be provided through a direction under Section 3 of the Industry Act 1975 to a company owned wholly or partly by the NEB—as, for example, in the case mentioned by the hon. Member for Surrey, North-West (Mr. Grylls), in which British Leyland had £70 million advanced by the NEB and £30 million under Section 8 of the Industry Act 1972.
There is absolutely no question of forcibly feeding the NEB with Section 8 money, as the hon. Member suggested. One of the important elements is that Section 3 money made by direction of the Secretary of State is restorable to the NEB; hence, a Section 3 direction gives the NEB much more flexibility, especially where NEB funds may already be allocated.
I am very surprised that the Conservative Opposition are taking their view when only last night they put on a party political broadcast in which a group of people talked about the Conservative attitude to the trade union movement. In the TUC Economic Review for 1976, in Section 43, the TUC specifically make the point that they do not want any unnecessary restrictions on the NEB.
This is not a question of accepting directions from the TUC but simply of obeying a commonsense approach to cooperation with the trade unions. I should have thought that, if the TUC had put forward a proposal, it should be taken seriously and, of course, it is taken seriously by the Government—but, alas, not, apparently, by the Opposition.
In Section 43 on page 27 of its Economic Review the TUC suggests that the NEB will be the main interventionist instrument in industrial strategy. It is vital that the NEB's prime role in the industrial strategy is recognised and that it is not hindered in its ambitions by unnecessary restrictions. In our view, the amendment would certainly constitute an unnecessary restriction.

Mr. Grylls: I have been trying to follow the Minister's answer to my question about Leyland money. He has not given an answer. Can he say why not all the money came from the NEB, which has plenty of money—£1,000 million?

Mr. Cryer: The notion that the NEB has plenty of money is fallacious. The £1,000 million is spread over at least four years and the TUC was asking in its document for £1,000 million a year. It would therefore seem entirely reasonable to make the division of money to British Leyland. Of course, that is, at least in part, a matter for the NEB and not wholly for the Secretary of State, but at the same time the Section 8 assistance under Section 3 of the 1975 Act in no way suggested a lack of confidence by the NEB in British Leyland.
When I recently visited the Motor Show, it gave me great pleasure to see a fine British Leyland stand exhibiting a wide range of cars. I was conscious that, but for the action taken by a Labour Government, which was dealt with churlishly by the Conservative Party, there is a strong possibility that that stand would not be there—certainly that the volume car production would not be there.
Therefore, the attitude of the NEB is clear. It has confidence in British Leyland, the British nation has confidence in British Leyland, and we certainly need a company like British Leyland prepared to go out and battle in the markets of the world with the car industries of Japan and the Common Market.

Mr. Norman Tebbit: Does the Minister think that the fact that about 40 per cent, of cars on the home market are now imported is the criterion by which he guesses that the British public have confidence in British Leyland?

Mr. Cryer: That was not a particularly helpful intervention. If the Conservative Party had its way, the level of imports would be more than 40 per cent.—probably about 50 or 60 per cent. Of course I greatly regret the level of 40 per cent, penetration, but at least we have a viable motor industry which can meet some of its competition. If the matter had rested with the Conservative Party, British Leyland would now be in a much different way of operation. Volume car production would almost certainly not exist and Chrysler would have gone to the wall as well. Therefore, the Opposition clearly have no grounds for making any allegations about the Government's attitude towards the car industry. The industry stands in debt to the Labour Government.

4.30 p.m.

Sir Anthony Meyer: Had it not been for Government assistance, the Leyland stand might have contained a smaller number of different models, but models with a reasonable chance of selling at a profit, instead of Leyland's boasting that it produces the largest range of cars. That is no way to run a profitable motor industry.

Mr. Cryer: That is a characteristically defeatist attitude. It would be pleasant if Opposition Members expressed a strong desire to see the British motor industry succeed instead of making carping comments about the sort of range which Leyland is currently selling.
Clearly, the amendment flies in the face of the policy advocated by the TUC and achieved by the Government in co-operation with the trade union movement. Any Section 8 assistance would be subject to the normal criteria for selective assistance. Having decided to provide the assistance, the Secretary of State has a choice of providing it directly to the company or through the National Enterprise Board via a Section 3 direction. The main factor determining this choice is monitoring—that is, ensuring that the funds provided are applied strictly to the approved purposes and used effectively.
By enacting the Industry Act 1975 Parliament deemed the NEB to be a competent body in which major public interest might be vested. Therefore, the NEB can reasonably be regarded as a fit and proper body to exercise a monitoring function wherever it makes good administrative sense so to do. If the NEB is already interested in a company, that means being involved in the running of it to a greater or lesser degree. To deny the Secretary of State the right to give a direction to the NEB under Section 3 of the 1975 Act would mean that any Section 8 money advanced would have to be given directly and monitored by the Department, which would lead to wasteful and unnecessary duplication.
The hon. Member for Surrey, North-West said that there was scant parliamentary control of this process, that parliamentary control was being taken away from the House. There is already adequate scrutiny by Parliament of the NEB. The interim statement covering the period 20th November 1975 to 30th June 1976 was laid before the House on


12th October, and before the Lords on 27th September.
I have not noticed—for example, during business questions today—any notable pressure from the Opposition for time to debate this statement. They have that opportunity and can use some of their time for this kind of issue if they feel that it is important. But the interim statement, which indicates some degree of success by the NEB—perhaps that is why the Opposition do not wish to debate it—has certainly been placed before the House.
In addition, when a direction is given under Section 3 of the Industry Act 1975 a statement must be laid before the House about the direction as soon as practicable. In any event, if the Opposition's view is that this is some form of extending ownership of the means of production, distribution and exchange, I remind them that Section 8 assistance must require the consent of the company to the holding of shares. It seems to me, and I am sure to most sensible people, that there are sufficient safeguards. I accept the view that:
There may be occasions when a government has to intervene to assist a company in financial difficulties on strategic, or technological or other grounds.
I would not like to restrict the Secretary of State's opportunity to do this. That quotation is taken from the Conservative document "The Right Approach". It seems that the Conservatives are prepared to advance discretionary powers to the Government in the case of entirely-owned private firms but not in the case of firms wholly or partly owned by the NEB.
The NEB is a vital part of the Government's strategy. We want it to succeed. We do not want it to be restricted, nor do we want the Secretary of State restricted in his application of the legislation.
I believe in the NEB. I hope that we shall have some indications from the Opposition that they, too, believe in it. Unfortunately, the indication seems to be that they wish to abolish it. It is an important part of our strategy for ensuring that investment goes into British manufacturing industry so that the basis of all our strategy—the provision of social services—has a sound manufacturing base on which to succeed. Any restrictions placed in the way of the Secretary of State

or the NEB would go very much against that aim.

Mr. Tom King: I welcome the hon. Member for Keighley (Mr. Cryer) to his new post. Plus ça change, plus e'est la même chose. On Second Reading I had to welcome another Minister, the Minister of State. I said then that it would not be a long welcome, because we had to welcome new Ministers in the Department quite often. Here we are on Report and we have a new Minister. I sincerely welcome him. I am fascinated to see him as part of the Establishment, clutching in a rather nervous hand the departmental brief. It may also stagger a few of his constituents to find him in his new position.
Has there been a further change within the Department? I am not aware that the hon. Member for Nuneaton (Mr. Huckfield), whom I see present, has changed his responsibilities. He took the Bill through Committee, but for some reason he is not taking it through the Report stage. I am not clear whether there has been a reallocation of responsibilities, but there seems to be a further unnecessary confusion within the Department. I say that with no disrespect to the hon. Member for Keighley.
I do not think that the hon. Gentleman will feel that his maiden appearance at the Dispatch Box was a universal success. I am not sure what all those comments about the car industry were intended to mean. I was interested in his remark that if the Conservative Party had had its way there would have been no Chrysler operation in this country now. I remind him that if his own Secretary of State had had his way, there would be no Chrysler operation on the present scale. It is not a happy topic for Ministers in the Department to discuss. The history of that matter is too well known to need repeating.
The hon. Gentleman was very pleased about the great new range of cars which British Leyland has at the Motor Show in its new nationalised NEB guise. It is worth remembering that every one of those models is the creation of the previous private-sector company. Lord Stokes gets a lot of stick, but all those cars which are now the spearhead of the range on which many hopes are based—we wish them well, because in the interests of the country we must hope that


they will succeed—are nothing to do with the present management which has been responsible for production. For the design we should pay tribute to the previous management.
I hope that the hon. Gentleman is not here in his new rôle solely as spokesman for the TUC. Half his speech consisted of reading a TUC brief. The hon. Gentleman is not now a Member sponsored by a union with TUC affiliations but a Minister in Her Majesty's Government, for whom the TUC is merely one of a number of outside bodies which will properly want to make representations. The TUC will have a point of view, but it is not a body with overriding importance, one entitled to overriding consideration and whose view is final in all these matters.

Mr. Cryer: I am sure that the hon. Gentleman will accept that it is important to take all views into consideration, including those of the TUC. Perhaps he can explain why he decides in the amendment to fly in the face of TUC advice, particularly when his party is grovelling after the trade union vote.

Mr. King: I was saying why the amendment was necessary. The point I made was that the TUC was only one of the bodies concerned.
Certainly there should be consultations at all times. There should be consultations with all interested parties. If the Under-Secretary studies his speech, he will see that he told us that the judgment of the TUC is final. His opening argument was to say that this is the case just because the TUC said it must be so. If he reads his speech in Hansard, he will see that he advanced this as a justification, and in his intervention just now he challenged me to say how I could go against the judgment of the TUC.
I respect the judgment of the TUC—clearly one would be a fool not to respect its judgment on industrial matters. Its views are valuable and should be noted and considered, but it is not the final arbiter in matters such as these.
Our concern in the amendment is not about whether the NEB should exist. This argument is quite separate. The position is that we have the NEB with its own funds, and we also have the

Industry Act, which supplies funds under Sections 7 and 8. We particularly object to the confusion caused by having Government funds from two different sources crossed in this way. This makes it much more difficult to identify where these funds are going and the performance that they are generating.
The Minister's argument is the same as that given by the Minister of State in Committee, namely, that this helps monitoring. Both have the point precisely wrong. Unless they are saying that the Department will not monitor Section 8 money to the NEB, there must be duplication of monitoring. I trust that no Minister will say that the Department has no responsibility here.
The senior civil servant in the Department is the accounting officer responsible for all Section 8 money. If there has been any change in that policy, we shall be very interested to hear it. It is the responsibility of the senior civil servant to see that all Section 8 money is properly monitored. Therefore we have a situation in which the Government have said the NEB will monitor it but the Department will still monitor it as well. It would be much simpler if the NEB monitored its own companies' funds and companies applying to the Government under Section 8 of the Industry Act for funds were monitored by the Department. How can the Minister honestly suggest that it will simplify and reduce monitoring by having money coming through two channels? Monitoring by the NEB and the Department is a palpable duplication, and our belief is that it should be simplified.
It is difficult in the present situation because the Government are putting money into industry in a whole range of different ways—by selective assistance and various schemes. In the Under-Secretary's own constituency money has been put into machine tools. Money is also going into stockpiling, wool textiles, ferrous foundry schemes and in general assistance to companies under Section 8. There is also the possibility of investment by the NEB, so money is going around all different sections, leaving aside employment subsidy schemes.
There is a problem with monitoring and establishing where money is going and whether it is being properly used. It


is important to keep this sort of monitoring as simple as possible. Clearly this can give rise to considerable misunderstanding, as in the case of British Leyland. Lord Ryder was determined that companies in the NEB would perform in a thoroughly commercial way and that their rate of return would be commercially viable. When the last money was advanced, there was an attempt to fudge the issue, to reduce his capital and get money from other sources by using the Industry Act money. No account was taken of the performance ratio or assessments in other areas. The money was just being pushed around from one sector to another, and it was impossible to tell how much State money was in the activity, and what the performance was in relation to it.

Mr. Richard Wainwright: If the reason for the amendment is that Conservatives do not want cross-fertilisation between different sections of assistance, why is this amendment so narrowly drafted? It refers only to directions under Section 3. Why does it not include all other forms

of Industry Act assistance to NEB companies?

Mr. King: I shall give an unsatisfactory answer to that. We are able to debate this matter only because the Division on this amendment was tied in Committee, and it is not possible under the rules of procedure to change its wording on Report. There is a case for extending the areas of simplification but we were restricted by the rules of the House on Report.
It is clear to the House from the Under-Secretary's answer that the TUC wants no restrictions and no changes in the way the NEB is set up. He regards this as an overwhelming argument. While I respect the TUC's point of view, I do not believe that it is the overriding consideration. Our amendment will simplify and improve the Bill, and I hope that it will be fully supported in the Lobby.

Question put, That the amendment be made: —

The House divided: Ayes 195, Noes, 212.

Division No. 352.]
AYES
[4.47 p.m.


Adley, Robert
Emery, Peter
Hutchison, Michael Clark


Alison, Michael
Eyre, Reginald
Irving, Charles (Cheltenham)


Arnold, Tom
Fairbairn, Nicholas
James, David


Atkins, Rt Hon H. (Spelthorne)
Fairgrieve, Russell
Jessel, Toby


Baker, Kenneth
Fell, Anthony
Johnston, Russell (Inverness)


Bell, Ronald
Fisher, Sir Nigel
Jones, Arthur (Daventry)


Bennett, Sir Frederic (Torbay)
Fletcher-Cooke, Charles
Jopling, Michael


Bennett, Dr Reginald (Fareham)
Fookes, Miss Janet
Kershaw, Anthony


Benyon, W.
Forman, Nigel
Kimball, Marcus


Berry, Hon Anthony
Fowler, Norman (Sutton C'f'd)
King, Evelyn (South Dorset)


Biffen, John
Fox, Marcus
King, Tom (Bridgwater)


Biggs-Davison, John
Freud, Clement
Kitson, Sir Timothy


Blaker, Peter
Fry, Peter
Knight, Mrs Jill


Boscawen, Hon Robert
Gilmour, Rt Hon Ian (Chesham)
Knox, David


Bottomley, Peter
Glyn, Dr Alan
Lamont, Norman


Boyson, Dr Rhodes (Brent)
Goodhart, Philip
Lawrence, Ivan


Braine, Sir Bernard
Goodhew, Victor
Lawson, Nigel


Brittan, Leon
Gorst, John
Le Marchant, Spencer


Brocklebank-Fowler, C.
Gow, Ian (Eastbourne)
Lester, Jim (Beeston)


Brotherton, Michael
Gower, Sir Raymond (Barry)
Lewis, Kenneth (Rutland)


Brown, Sir Edward (Bath)
Grant, Anthony (Harrow C)
Lloyd, Ian


Bryan, Sir Paul
Gray, Hamish
Luce, Richard


Buchanan-Smith, Alick
Grist, Ian
McAdden, Sir Stephen


Buck, Antony
Grylls, Michael
McCusker, H.


Budgen, Nick
Hall, Sir John
Macfarlane, Neil


Bulmer, Esmond
Hall-Davis, A. G. F.
MacGregor, John


Burden, F. A.
Hamilton, Michael (Salisbury)
Macmillan, Rt Hon M. (Farnham)


Butler, Adam (Bosworth)
Hampson, Dr Keith
Madel, David


Chalker, Mrs Lynda
Hannam, John
Marten, Nell


Channon, Paul
Harvie Anderson, Rt Hon Miss
Mates, Michael


Clark, Alan (Plymouth, Sutton)
Havers, Sir Michael
Mather, Carol


Clark, William (Croydon S)
Hawkins, Paul
Maude, Angus


Clegg, Walter
Hayhoe, Barney
Mawby, Ray


Cooke, Robert (Bristol W)
Heseltine, Michael
Maxwell-Hyslop, Robin


Cope, John
Holland, Philip
Mayhew, Patrick


Contain, A. P.
Hooson, Emlyn
Meyer, Sir Anthony


Davies, Rt Hon J. (Knutsford)
Hordern, Peter
Mills, Peter


Dean, Paul (N Somerset)
Howe, Rt Hon Sir Geoffrey
Miscampbell, Norman


Dodsworth, Geoffrey
Howell, David (Guildford)
Moate, Roger


du Cann, Rt Hon Edward
Hunt, David (Wirral)
Molyneaux, James


Eden, Rt Hon Sir John
Hunt, John (Bromley)
Monro, Hector


Elliott, Sir William
Hurd, Douglas
Moore, John (Croydon C)




More, Jasper (Ludlow)
Ridley, Hon Nicholas
Stradling Thomas, J.


Morgan, Geraint
Ridsdale, Julian
Taylor, R. (Croydon NW)


Morgan-Giles, Rear-Admiral
Rifkind, Malcolm
Taylor, Teddy (Cathcart)


Morris, Michael (Northampton S)
Rippon, Rt Hon Geoffrey
Tebbit, Norman


Morrison, Charles (Devizes)
Roberts, Wyn (Conway)
Temple-Morris, Peter


Morrison, Hon Peter (Chester)
Rodgers Sir John (Sevenoaks)
Thatcher, Rt Hon Margaret


Mudd, David
Ross, Stephen (Isle of Wight)
Thorpe, Rt Hon Jeremy (N Devon)


Neave, Airey
Rossi, Hugh (Hornsey)
Townsend, Cyril D.


Nelson, Anthony
Rost, Peter (SE Derbyshire)
Trotter, Neville


Neubert, Michael
Royle, Sir Anthony
Tugendhat, Christopher


Oppenheim, Mrs Sally
St. John-Stevas, Norman
van Straubenzee, W. R.


Page, John (Harrow West)
Scott, Nicholas
Vaughan, Dr Gerald


Page, Rt Hon R. Graham (Crosby)
Shaw, Giles (Pudsey)
Wainwright, Richard (Colne V)


Paisley, Rev Ian
Shelton, William (Streatham)
Wakeham, John


Pardoe, John
Shepherd, Colin
Wall, Patrick


Pattie, Geoffrey
Silvester, Fred
Walters, Dennis


Penhaligon, David
Sims, Roger
Weatherill, Bernard


Percival, Ian
Speed, Keith
Wiggin, Jerry


Price, David (Eastleigh)
Spence, John
Winterton, Nicholas


Pym, Rt Hon Francis
Spicer, Michael (S Worcester)
Wood, Rt Hon Richard


Raison, Timothy
Sproat, Iain



Rathbone, Tim
Stanbrook, Ivor
TELLERS FOR THE AYES:


Rees, Peter (Dover &amp; Deal)
Stanley, John
Mr. John Corrie and


Rees-Davies, W. R.
Stewart, Ian (Hitchin)
Mr. Michael Roberts.


Renton, Rt Hon Sir D. (Hunts)






NOES


Abse, Leo
Duffy, A. E. P.
Lewis, Arthur (Newham N)


Allaun, Frank
Dunn, James A.
Lipton, Marcus


Anderson, Donald
Dunnett, Jack
Litterick, Tom


Archer, Peter
Eadie, Alex
Loyden, Eddie


Armstrong, Ernest
Edge, Geoff
Luard, Evan


Ashley, Jack
Edwards, Robert (Wolv SE)
McCartney, Hugh


Ashton, Joe
Ellis, John (Brigg &amp; Scun)
McElhone, Frank


Atkins, Ronald (Preston N)
English, Michael
McGuire, Michael (Ince)


Atkinson, Norman
Evans, Fred (Caerphilly)
MacKenzie, Gregor


Bagier, Gordon A. T.
Evans, Ioan (Aberdare)
Mackintosh, John P.


Barnett, Guy (Greenwich)
Ewing, Harry (Stirling)
Maclennan, Robert


Bates, Alf
Faulds, Andrew
McMillan, Tom (Glasgow C)


Benn, Rt Hon Anthony Wedgwood
Fitch, Alan (Wigan)
McNamara, Kevin


Bennett, Andrew (Stockport N)
Flannery, Martin
Madden, Max


Bidwell, Sydney
Fletcher, Ted (Darlington)
Magee, Bryan


Bishop, E. S.
Ford, Ben
Mahon, Simon


Blenkinsop, Arthur
Forrester, John
Mallalieu, J. P. W.


Boardman, H.
Fraser, John (Lambeth, N'w'd)
Marks, Kenneth


Booth, Rt Hon Albert
George, Bruce
Marshall, Dr Edmund (Goole)


Bottomley, Rt Hon Arthur
Gilbert, Dr John
Marshall, Jim (Leicester S)


Boyden, James (Bish Auck)
Ginsburg, David
Maynard, Miss Joan


Bradley, Tom
Gould, Bryan
Mellish, Rt Hon Robert


Bray, Dr Jeremy
Gourlay Harry
Mikardo, Ian


Brown, Hugh D. (Provan)
Graham, Ted
Miller, Dr M. S (E Kilbride)


Brown, Ronald (Hackney S)
Grand, John (Isligton C)



Buchan, Norman
Hamilton, James (Bothwell)
Moonman, Erlc


Buchanan, Richard
Hardy, Peter
Morris, Alfred (Wythenshawe)


Butler, Mrs Joyce (Wood Green)
Harrison, Walter (Wakefield)
Morris, Charles R. (Openshaw)


Callaghan, Jim (Middleton &amp; p)
Hatton, Frank
Oakes, Gordon


Campbell, Ian
Heffer, Eric S.
Ogden, Eric


Canavan, Dennis
Henderson, Douglas
Ovenden, John


Cant, R. B.

Parry, Robert


Carmichael, Neil
Hooley, Frank
Pavitt, Laurie


Carter-Jones, Lewis
Horam, John
Price, C. (Lewisham W)


Cartwright John
Howell, Rt Hon Denis (B'ham, Sm H)
Price, William (Rugby)


Clemitson, Ivor
Huckfield, Les
Radice, Giles


Cocks, Rt Hon Michael (Bristol S)
Hughes, Rt Hon C. (Anglesey)
Roberts, Albert (Normanton)


Cohen, Stanley
Hughes, Robert (Aberdeen N)
Roberts, Gwilym (Cannock)


Coleman, Donald
Hughes, Roy (Newport)
Roderick, Caerwyn


Conlan, Bernard
Hunter, Adam
Rodgers George (Chorley)


Cook, Robin F. (Edin C)
Irvine, Rt Hon Sir A. (Edge Hill)
Rodgers, Sir John (Sevenoaks)


Corbett, Robin
Jackson, Miss Margaret (Lincoln)
Rodgers, Rt Hon William (Stockton)


Cox, Thomas (Tooting)
Janner, Greville
Rooker, J. W.


Craigen, J. M. (Maryhill)
Jay, Rt Hon Douglas
Roper, John


Crawshaw, Richard
Jenkins, Hugh (Putney)
Ross, Rt Hon W. (Kilmarnock)


Crosland, Rt Hon Anthony
John, Brynmor
Rowlands, Ted


Crowther, Stan (Rotherham)
Johnson, Walter (Derby S)
Ryman, John


Cryer, Bob
Jones, Alec (Rhondda)
Sandelson, Neville


Cunningham, G. (Islington S)
Jones, Barry (East Flint)
Sedgemore, Brian


Davidson, Arthur
Jones, Dan (Burnley)
Shaw, Arnold (Ilford South)


Davies, Bryan (Enfield N)
Judd, Frank
Sheldon, Robert (Ashton-u-Lyne)


Davies, Denzil (Llanelll)
Kaufman, Gerald
Short, Mrs Renée (Wolv NE)


Davies, Ifor (Gower)
Kershaw, Anthony
Silkin, Rt Hon John (Deptford)


Deakins, Eric
Lamborn, Harry
Silverman, Julius


Dean, Joseph (Leeds West)
Lamond, James
Skinner, Dennis


Doig, Peter
Latham, Arthur (Paddington)
Snape, Peter


Dormand, J. D.
Leadbitter, Ted
Spearing, Nigel


Douglas-Mann, Bruce
Lestor, Miss Joan (Eton &amp; Slough)
Spriggs, Leslie







Stallard, A. W.
Wainwright, Edwin (Dearne V)
Williams, Alan (Swansea W)


Stanbrook, Ivor
Walden, Brian (B'ham, L'dyw'd)
Williams, Alan Lee (Hornch'ch)


Stoddart, David
Walker, Harold (Doncaster)
Williams, Rt Hon Shirley (Hertford)


Stott, Roger
Walker, Terry (Kingswood)
Williams, Sir Thomas (Warrington)


Strang, Gavin
Ward, Michael
Wilson, Alexander (Hamilton)


Strauss, Rt Hon G. R.
Watkins, David
Wilson, Rt Hon Sir Harold (Huyton)


Summerskill, Hon Dr Shirley
Watkinson, John
Wise, Mrs Audrey


Taylor, Mrs Ann (Bolton W)
Weetch, Ken
Woodall, Alec


Thomas, Jeffrey (Abertillery)
Weitzman, David
Woof, Robert


Thomas, Mike (Newcastle E)
Wellbeloved, James
Young, David (Bolton E)


Thomas, Ron (Bristol NW)
White, Frank R. (Bury)



Tomlinson, John
White, James (Pollock)
TELLERS FOR THE NOES:


Tomney, Frank
Whitehead, Phillip
Mr. James Tinn and


Torney, Tom
Whitlock, William
Mr. Joseph Harper.


Urwin, T. W.

Question accordingly negatived.

Orders of the Day — Clause 1

INCREASE IN LIMIT ON SECRETARY OF STATE'S FINANCIAL ASSISTANCE TO INDUSTRY

5.0 p.m.

Mr. Tom King: I beg to move Amendment No. 5, in page 1, line 10, at end insert
'Provided that the Secretary of State shall not use any of the money for the acquisition of pharmaceutical firms, and'.

Mr. Deputy Speaker (Sir Myer Galpern): With this we may take the following amendments:

No. 7, in page 1, line 13, at end insert
'or finance houses, merchant banks, and hire purchase companies'.

No. 8, in page 1, line 13, at end insert
'or the acquisition of any port'.

No. 9, in page 1, line 13, at end insert
'or the acquisition of any road haulage company'.

No. 10, in page 1, line 13, at end insert
'or the acquisition of building and civil engineering contractors'.

Mr. King: You will notice, Mr. Deputy Speaker, that the Bill is not quite the same Bill as left the House after the Second Reading as long ago, amazing as it may seem, as 22nd April. I pay tribute here to my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) because now the Bill has added to it a remarkable passage. The Bill is not a simple Bill for it is an extremely expensive one, although it is not very long. It has been lengthened by the important words
Provided that the Secretary of State shall not use any of the money for the acquisition

or assistance of banks or insurance companies".
The House will have noted that the Government have made no effort to remove those words from the Bill. We welcome that perfectly proper action by the Government. Unless the other place decides to mutilate this measure, those words will remain.
We should also pay tribute to the conscience of the hon. Members from Derby, North (Mr. Whitehead) and Coventry, North-west (Mr. Robinson) whose abstention on that occasion enabled this important amendment to be made. They are not present for the debate today, and they are obviously well satisfied with the condition in which the Bill has returned to the House.
However, there are other matters and items which should also be written into the Bill. I do not in any way decry the efforts of my hon. Friends in Committee, but I wonder whether they went far enough. We have therefore listed a number of other exclusions that we think are relevant. Amendment No. 5 deals with the acquisition of pharmaceutical firms. The others deal with the acquisition of the ports, road haulage companies and building and civil engineering contractors. There may be some who wonder where these items come from. Let me refer them to "Labour's Programme 1976." It is twice as expensive as the Conservative policy document, and I believe there is something symbolic in that. It sells at 50p and we know that it is the Prime Minister's favourite reading. He often quotes from it in the House.
This document, which was put forward and approved by the Labour Party National Executve Committee and endorsed by the Labour Party Conference, is, if I can remember the Prime Minister's words correctly,
the sum of all our hopes".


To a number of gentlemen overseas it is the sum of all their fears of what may happen if the Labour Party carries its programme forward. I need hardly add that it represents the worst fears of the great majority of people in this country, too.
So the interests mentioned in our amendments are at risk under Labour's programme. They are all under the threat of nationalisation in one form or another. It is important, therefore, for Ministers to have the opportunity to make their position clear. The House will listen to what they say, as will the country and, I am afraid, certain gentlemen overseas. We are giving the Government the opportunity to make quite clear that in view of the country's economic situation "Labour's Programme 1976" is obsolete almost as soon as it has been printed, and that they will no longer attempt to pursue this policy. In the unlikely event that they are not prepared to accept the amendments we must draw our own conclusions, and many other people will notice their action in that case.
In the past couple of weeks we have seen just how much everybody in this country has suffered from the lack of confidence in the Government and in the policies that they have been pursuing. We have seen the damage that these have done to the pound and the damage that they will do to the rate of inflation and the standard of living of our people. It is therefore important to take every opportunity to try to secure a united voice in the House of Commons, a voice which speaks the language of common sense, which shows that we are not prepared to pursue more Left-wing policies, that the situation is far too serious for that, and that instead we shall ensure that the nationalisation proposals are not allowed even to be discussed in our present economic difficulties.
There is a difficult problem here because whatever the Prime Minister or other Ministers may say, observers at home and abroad will have seen the amazing incidents yesterday in which the NEC of the Labour Party actually carried a vote to lead a protest against the policies of its own government, and where the General Secretary of the

Labour Party was instructed to send orders to all the constituency parties—

Mr. Deputy Speaker: Order, I do not like interrupting the hon. Member, but strictly speaking what he is referring to has nothing to do with the amendment.

Mr. Nicholas Ridley: On a point of order, Mr. Deputy Speaker. Unpalatable though my hon. Friend's words may be to some, surely they are directly relevant. We are talking about whether this money should be expended in the nationalisation and acquisition in all sorts of concerns, and that is at the heart of the Labour Party's internal debate. I would have thought it possible for my hon. Friend to develop these most interesting arguments.

Mr. Deputy Speaker: The Chair is not concerned with whether what the hon. Member says is palatable or unpalatable. I am concerned only to discharge my duties while I occupy the Chair. We are discussing a series of amendments which specifically mention items or areas of industry on which the Opposition do not want the money spent. I cannot understand what that has to do with the goings on in the National Executive.

Mr. King: I appreciate your guidance, Mr. Deputy Speaker. I know that there is no dispute whether these are palatable or unpalatable matters, because they are clearly most unpalatable to all of us. The issue was whether it was relevant to refer to the control or lack of control that exists within the Labour Government and the Labour Party. I submit that it is relevant. It is important when such substantial sums are made available by the Bill that we should clearly define the uses to which they may or may not be put. We believe it important to add these new categories because we have to restore confidence both at home and abroad by showing that the Government do not intend to nationalise these activities.
But then there is a weakness in my argument. If the Government accept our amendments and agree that confidence must be restored we must recognise that not many people will find such an undertaking by the Minister very convincing. It was that factor which led me on to the problem of the division within the Labour Party and the appalling situation


in which Mr. Ron Hayward will be forced to write to the constituency parties inviting them to lobby Parliament and protest against Government policy. Thus our difficulty is whether anyone would believe such a statement by the Government and whether it would carry widespread conviction here and abroad. Apart from the damage which the commission of nationalisation may do, I have always been equally concerned about the damage done by the threat of nationalisation.
I ask you, Mr. Deputy Speaker, to imagine that you are responsible for the investment of a pharmaceutical company. When you read this Labour Party document, are you likely to expand investment in this country? Imagine an overseas company considering investment in the EEC and wondering which country to choose as the site. When it looks at the SPD in Germany and the Labour Party programme for 1976, which country is it most likely to choose?
I trust that it is still Government policy to encourage inward investment. If so, have they no concept of the damage which these threats, gaily delivered in party policy statements, do in the minds of people throughout the world who are considering investment?
No. hon. Member with even the slightest understanding of the regional problems of this country or the present industrial structure of Scotland and, in particular, Ulster, and the contribution made by inward investment to the employment and economy of those areas, can doubt the value of that investment. But it is a competitive business. Many other countries would like to attract mobile international investment and any country which produces unnecessary and damaging handicaps and hindrances of the kind contained in this document has only itself to blame if investment is not forthcoming.
We should also remember another major disincentive. International companies who have invested here in recent years have been forced by the weakness of sterling to pay a heavy price. Their assets have steadily depreciated and in many cases they have had to be written down in consolidated accounts. We do not want to make the handicaps any greater.
Our amendments are a small effort to make the Government see sense and to

agree that funds will not be used under this Bill for any of the purposes set out in the amendments.
Some of my hon. Friends may wish to speak on individual amendments. We feel that their inclusion is a test of the Government's faith. Are they going to pursue the industrial strategy much heralded at Chequers but seemingly forgotten ever since, or is the NEC now rampant with the Labour programme for 1976 as the bible for implementation? What will be the industrial future of this country?

Mr. Brian Sedgemore: I wish only to ask the Minister two questions. First, can he confirm that even if the amendments were passed, they would not affect the power of the National Enteprise Board to buy into or buy out the whole pharmaceutical industry if it wished and would have no effect on the power of the National Enterprise Board to buy into or buy out any workers' co-operative?
Secondly, can the Minister confirm that nothing in the Bill, not even the words:
Provided that the Secretary of State shall not use any of the money for the acquisition or assistance of banks or insurance companies.".
affects the power of the NEB to buy into or buy out every insurance or banking company in the country if it so wishes?

5.15 p.m.

Sir John Eden: I start by declaring an interest in insurance and engineering.
The amendments seek a simple and direct answer from the Government. I expect that the Minister will have no difficulty in making abundantly clear that he fully supports the intentions behind the amendment and in confirming, on behalf of the Government, that under no circumstances would they seek to use public money to acquire sections of the industries listed in the amendments.
I do not expect that the Minister will even require a brief to be able to say that. He may, for some technical reason, wish to turn aside individual amendments, but he can still undo much of the harm already done by the Labour Party document if he makes a clear declaration along the lines I have indicated.
My hon. Friend the Member for Bridgwater (Mr. King) spoke about the damage done to industry and investment from spoken or written threats to acquire sectors of the economy. I have had recent experience of some of the problems with which our industrialists have to contend. They find it difficult enough to sell their products in a highly competitive environment.
In so many instances, the quality of our goods is better than anything produced by our competitors and we have been making inroads in overseas markets. The problem facing industrialists is that no matter how good their products are, they are having to answer for the quality of the Government. Whatever difficulties they experience in selling their goods, they are nothing compared to the difficulties they have in selling the Government.
The lack of credibility in the Government is undermining the efforts of British manufacturers in overseas markets. This is a point which the Minister should take to heart. He should know that if a document produced by a political party is extreme in its demands or tendentious in its language and is not disavowed by the party leaders, it can do great damage. There is a precedent. Statements have been made on behalf of his party which have subsequently found their way into law.
There is, therefore, every justification for people being concerned about the recent publication and about statements made by members of the Labour Party. I hope that the Minister will make clear on behalf of the Government that he has a sense of responsibility towards British industry and commerce and that he will stand up against the lunatic advice of some members of his party.
Various sectors of industry are represented in this group of amendments and perhaps the hon. Gentleman will find it easier to make the formal and straightforward declaration for which I have called on some rather than others. He may find it difficult to make such a declaration in respect of financial institutions. Perhaps that will be so because from some old-fashioned loyalty he does not want to pre-empt the inquiry into City institutions that is to be headed by the former Prime Minister, or does not want to prejudge some of the conclusions.

If he has difficulties in that respect, at least he should have no trouble in making clear the Government's view about the essential quality of the contribution made to our balance of payments and the economy by City financial institutions.
I hope that the hon. Gentleman will use the amendment to take the opportunity to make such a formal declaration, and in so doing to discount some of the anxieties, which are substantial, which have been spreading throughout the insurance and banking industries, for example, as a result of the views of elements within the Labour Party, their professed desire being to take such institutions into public ownership.
I wonder whether Labour Members could enumerate the advantages that they expect to accrue to the insurance and banking sectors, for example, and the economy were there to be wholesale acquisition by means of increasing public expenditure through the public purse. What benefit would they expect to give to any one area? Would they not be wiser first to examine the performance of the sectors of industry that are currently within public ownership? I have no doubt that they would have much to say about the improvements that are needed. After all, within our memory are recent statements by the previous Chairman of British Rail condemning so much of the service to the public that is provided by that nationalised industry. I have no doubt that other Labour Members are concerned about the quality of service that is given by other sectors of public industry. We do not want to add to the problems, which are large enough as they now exist, by embarking upon any further adventures with the investment of public money.
In these few brief remarks I hope to have indicated to the Under-Secretary of State the areas in which he could usefully make a positive contribution to the economic and industrial well being of this country by firmly and openly declaring on behalf of the Government that he agrees with the speech of my hon. Friend the Member for Bridgwater and that he, too, will support the amendment.

Mr. Dennis Skinner: I shall briefly take up some of the points made


by the right hon. Member for Bournemouth, West (Sir J. Eden). It was suggested earlier that this was to be a fairly narrow debate, bat in the course of the past few minutes it has been broadened considerably. Therefore, it will be necessary for me to view these matters from a rather broad spectrum although the amendments themselves are considered to be fairly narrow.
The right hon. Gentleman should understand even better than I do, as a member of a recent Government between 1970 and 1974, that when in Government it is extremely difficult to go about denationalising some of the industries and sectors to which he referred. Even a Tory Government that took office on a Selsdon manifesto would have extreme difficulty in following that course. We know that between 1970 and 1972 attempts were made to hive off certain parts of the public sector industries into the private sector in a so-called attempt to swing back the pendulum or to reverse the ratchet. Those attempts were made by the right hon. Member for Leeds, North-East (Sir K. Joseph) and they failed.
Although it is all right for Conservative Members to have some fun and games in the Chamber by talking about the great new private sector, the great new Utopia and the benefits that they will bring, they know that if they had the opportunity to be in Government the chances of doing al I the things that they may well include in their manifestos and get past their respective national executive, or whatever it is called, would be remote. That is because technology has developed as a result of collectivisation, and as a result of that the multinationals and the large monopolies gather pace year by year.

Mr. Nigel Lawson: Before the hon. Gentleman gets carired away, may I say that I agree with him that there are certain technical difficulties in denationalisation. However, does he not realise that it is partly for that reason that it is all the more important that industries are not destroyed by nationalisation in the first place?

Mr. Skinner: I read in my newspapers of large amounts of money being lavished in all directions. For example, there was Courtaulds, a part of the private sector that had never been tarnished by nationalisation. It has never been mentioned in

the long lists that we produce at Labour Party conferences from time to time. Despite having received £2 million under the Industry Act 1972, Courtaulds are now assisting in throwing out of work up to 25 per cent. of the whole working population of Skelmersdale and adding to the misery in many other areas throughout the country. That is the private sector. The hon. Gentleman knows that that has nothing to do with nationalisation. Indeed, it can be argued that if the nationalised sector, with an improved manufacturing base, were able to use more products, it might be able to use some of the Courtaulds capacity. If we had an alternative strategy, the chances of taking that course to a faster extent and to a greater degree would be rapidly improved.
As the hon. Member for Blaby (Mr. Lawson) knows, it is a nonsense to suggest that we can suddenly transform everything by the Opposition moving over to the other side of the Chamber. That is not on. There might be marginal changes and promises would be made, but the hon. Gentleman knows the way in which the ratchet is moving. He knows that if the private sector continues to hang out its begging bowl to whatever Government are in office—I am told that since this Government took office it has received £7,600 million—the hon. Gentleman's friends in manufacturing industry and other parts of industry will not be totally sold on the ideas that he and his Friends propound in the Chamber. They know that the days of complete and utter freedom and the playing of market forces have long since passed. The limited areas where that could operate are not included in the amendments. Eric Morley might be able to operate on free market forces and Ladbrokes and William Hill might just about do it. They could continue with a growth industry completely unfettered by these gifts from the State—indeed, from the taxpayer. The hon. Member for Blaby knows it, and he knows it to our cost.
5.30 p.m.
The debate on this aspect should get down to the fundamentals of this small but, for some people, important measure. What astounds me is that, despite having written in these few words about not including any reference to the banks and finance houses, the pound has not shot upwards. We are constantly told that, if


it were not for these Left-wing measures, the pound would be rocketing towards two dollars and, who knows, possible three dollars.
I suppose that my right hon. and hon. Friends have inserted these few words for the benefit of the International Monetary Fund. I think that Friedman and others ought to comment on the fact that they have slid a little way towards what the Opposition want in an attempt not merely to placate them—there may be some truth in that—but to placate the IMF.
As for the banks and the insurance companies—that area of our life which is so important—I take the simplistic view that this is not a matter of principle. I think that hon. Members, especially my hon. Friend the Member for Luton, West (Mr. Sedgemore), know that in banking there is a degree of intervention or interference. I sometimes detest the kind of interference about which I read—for example, the £70 million which was dropped on Slater Walker's desk back in November to assist Jim Slater or Jimmy Goldsmith with his problems.
This is not a matter of principle. Only recently two special attempts have been made by the Government, supported by the Opposition—at least, they have not said too much about it—to take away from the four major clearing banks their ability to do what they like.

Mr. Deputy Speaker: Order. I have allowed a great deal of latitude not only to the hon. Member for Bolsover (Mr. Skinner), but to others. The hon. Gentleman rightly pointed out that he was replying to some of the general remarks which have already been made. But we are not discussing the joint stock banks or the Bank of England. We are discussing finance houses, merchant banks and hire-purchase companies. A general debate on the banking system is completely out of order.

Mr. Sedgemore: Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: Order. It was not a point of order. No one raised a point of order.

Mr. Sedgemore: On a point of order.

Mr. Deputy Speaker: Is the hon. Gentleman raising a point of order?

Mr. Sedgemore: Yes. I am sure that you, Mr. Deputy Speaker, more than most hon. Members, because of your deep understanding of financial matters, will be aware that Slater Walker, to which my hon. Friend the Member for Bolsover (Mr. Skinner) referred, was in part a merchant bank and, indeed, was involved in one of the so-called great merchant bank takeovers which was to be a banque d'affaires. My hon. Friend is precisely on the point of this amendment. With respect, he could not be more in the centre of it.

Mr. Deputy Speaker: I disagree with the hon. Gentleman. The debate has gone much wider than the amendments. Therefore, I ask the hon. Member for Bolsover to try to keep that in mind.

Mr. Ridley: Further to that point of order, Mr. Deputy Speaker. Will it be in order to discuss the Crown Agents, Cable and Wireless, Giro, and other concerns of that kind? Surely that would be in order.

Mr. Deputy Speaker: I do not see them anywhere on the Order Paper.

Mr. Skinner: The point which I was trying to elaborate is quite simple. I was putting forward the general proposition as it affects all banks. I was including the special position of the major clearing banks with all their subsidiaries which are affected by these amendments. They are called on by the Government to take certain action which will control their ability to act freely. Even in this context the banks are not allowed to do just as they wish.
I shall skip over this point as quickly as possible. We suggest that, instead of the Government merely asking for special deposits and reducing the banks' opportunities to operate just as they wish in certain circumstances, control should go much further. We believe that in that way we can control investment and possibly, not necessarily, get away from the need to have the amendments or the Bill.
The Bill and the amendments are an attempt to control the economy by handing out palliatives and cosseting certain companies to enable them to operate within the economy to the better advantage, as the Government see it, of the


country. Some of us believe that extension of that control would be a major step forward, but that it is not a matter of principle because, by and large, the banks are to some extent controlled, but not as much as we would wish.
That is the message that I want to get across to the Minister. I do not want to stray too far. You, Mr. Deputy Speaker, have been listening with great interest.

Mr. Deputy Speaker: And I have been very lenient.

Mr. Skinner: And, as you say, you have been very lenient.
I hope that, whatever attitude the Government adopt towards these amendments, they will bear in mind that there has been an extension of the public sector over many years and that that extension will continue. It cannot be rolled back in the way which many Opposition Members may imagine. We should understand that there is no way of rolling it back. Therefore, we should be brave and say that we have to roll it forward and that extension should take place in the most vital areas of the economy. That is the spirit in which we should be tackling these amendments and the Bill.
According to the latest registered figures, there are nearly 1½ million on the dole. That is why the Bill has been introduced and why the amendments should be opposed. On the basis of a gradual increase in unemployment, a higher interest rate over the last two or three decades spiralling up to 15 per cent, and an increased plateau of inflation after two or three years, back to the situation in the early 1950s, we recognise that such measures have not proved totally successful. That is an under-statement if ever there was one. Therefore, we must strike out and be prepared to take any necessary measures to advance the public sector, to get people back to work, to have a larger manufacturing base, and to provide a better society and perhaps prevent the riots in the streets about which some of our leaders constantly talk.
I hope that the Under-Secretary of State will address himself to the direction in which I have tried to guide him, because that is the only way it will go anyway.

Mr. Ridley: I must first declare an interest as a director of a bank and an insurance company. In my own interest I should like the joint stock banks and seven big insurance companies to be nationalised because my company is small and not on the list. Nationalisation would mean that vast numbers of customers would come knocking on the doors of small companies and it is therefore in my interest that they be nationalised. But, as one who always puts the public interest first, I am prepared to forgo the great gold rush which these nationalisation measures would create.
The hon. Member for Bolsover (Mr. Skinner) lectured his two hon. Friends on the Front Bench in no uncertain terms. We are always delighted to hear his economic expertise in debate, and today was no exception. The hon. Gentleman did not need to lecture his hon. Friends because both are unwilling defenders of the Government line. I thought that I detected a shade of embarrassment cross the face of the hon. Member for Keighley (Mr. Cryer), whom I congratulate on his appointment. I wonder why he has not been asked to respond to this group of amendments. I thought he might have shown us his newfound fervour for the Government line that the major financial institutions should remain in private ownership. But, no. He has had the grace to be present but his colleague has been chosen to rebuff the arguments.
It is a pleasure for these matters to be argued in the Chamber. The Left wing and members of the National Executive Committee, most of whom are hon. Members of the House, usually argue privately. It would be refreshing not to have a sea of vacant green staring at us. But I give credit to those hon. Members who have come here to put forward their silly ideas in public instead of all this hiding behind the closed doors of Transport House and issuing statements ex cathedra.
The hon. Member for Bolsover did not say why he wanted to do all this rolling.

Mr. Skinner: It was not Rolls-Royce.

Mr. Ridley: That pun does not help The hon. Gentleman wanted to roll forward the frontier between the public sector and the private sector but he did not stop to say why.

Mr. Skinner: Because there are 1½ million on the dole, for a start.

Mr. Ridley: Perhaps there would be more if the hon. Gentleman had his way, and maybe that is one of the troubles.
Those industries which have been nationalised are flops and ghastly failures, so what is the point of extending that system? There are many reasons for their failure but the basic reason is simple.

Mr. Deputy Speaker: Order. I cannot see what the failure or success of nationalised industries has to do with the amendment under discussion. I should like the hon. Gentleman to satisfy me on that point, although I doubt whether he will be able to do so.

Mr. Ridley: I shall try to do that Mr. Deputy Speaker. I am in favour of Amendments Numbers 5, 7, 9 and 10. Because, if all of these industries were nationalised—

Mr. Deputy Speaker: Order. Let us get the matter straight, otherwise the debate will go far wide of the Bill, which we are not discussing, and of the amendments. The position is clear. Certain industries which the amendments seek to exclude from the use of public money have been listed.

5.45 p.m.

Sir J. Eden: On a point of order. If one is talking about the use of public money to acquire a road haulage company, as in Amendment No. 9, a building and civil engineering contractor, as in Amendment No. 10, or a pharmaceutical firm, one must first try to envisage what improvement, if any, would follow. Since we are supporting the amendments, surely the onus is on us to prove why. We can do that only by comparing industries in the private sector with those that are nationalised.

Mr. Deputy Speaker: I agree with the hon. Member's interpretation of what we should be discussing. Hon. Members should show why public money should not be spent in those particular fields. That is what the debate should be about. But they go too far when discussing the wider area of other industries, joint stock banks, Labour Party manifestos or the National Executive.

Mr. Michael Heseltine: Further to that point of order. Surely it is relevant to compare the present performance of existing nationalised industries when debating whether further companies or industries should be nationalised.

Mr. Deputy Speaker: We should be discussing the effect of the proposal upon, for instance, the pharmaceutical industry, and that is all. Hon. Members must not go into a general examination of industries on which public money has already been spent or say what will automatically happen to the industries under discussion. Hon. Members must show what will happen to a port, for instance, if it should be acquired.

The Under-Secretary of State for Industry (Mr. Les Huckfield): Further to that point of order. I should like to help the House. Opposition Members have raised points of order and I am sure that it would be of help if they realised that we are talking about matters which are based upon their own legislation. There is nothing in the Bill, in the 1972 or 1975 Acts upon which this Bill is based, about nationalisation. The Bill and those Acts are about voluntary acquisitions and acquisition by consent. There is nothing in the Bill—

Mr. Deputy Speaker: Order. That is not a point of order.

Mr. Lawson: Further to the point of order raised by my hon. Friend the Member for Henley (Mr. Heseltine). I am sure that you, Mr. Deputy Speaker, will be aware that in Aristotle's "Logic," upon which the rules of order are based, certain categories of argument were laid down. One of the main categories was argument by analogy.

Mr. Deputy Speaker: Aristotle did not lay down the Orders of the House of Commons. I am prepared to allow passing references, but hon. Members should not go into great detail. We have now exhausted this matter.

Mr. Tebbit: Further to that point of order, Mr. Deputy Speaker. Surely you must accept that if we do not discuss the record of industries which are already in public ownership we shall be discussing the matter as though this were some new idea which has never before been tried.
We would then have nothing but theory to go on, whereas in fact we have much practical experience. It would be wrong if we were not able to draw upon that, or to draw upon the general remarks of Sir Richard Marsh—

Mr. Deputy Speaker: Order. This is typical of what we are getting now. I appreciate the hon. Gentleman's point of order. I agree with a fleeting, passing reference to, say, a disaster in some particular field of nationalisation. That is all right. However, it is not in order to go into the whole history of what Sir Richard Marsh said or what someone else said. That would not be in order.
I must make this comment to the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). I am quite sure that, having heard the points of order, he now realises exactly what is and what is not in order.

Mr. Ridley: What I propose to do, Mr. Deputy Speaker, is this. Rather than refer to the pharmaceutical industry, the finance houses, merchant banks, hire-purchase companies, ports, road haulage companies and building and civil engineering contractors, I shall refer to them as "the industries in the amendments". Perhaps that will be all right.
I do not think that the industries in the amendments should be nationalised or should have public money provided for them in the event of serious trouble overcoming them. I want to put a very serious point to the House. I hope that hon. Members will listen to it, because it will not be popular, even among some of my hon. Friends. However, it must be said. This is not concerned with nationalisation at all.
What I am trying to point out is that once a company is connected to possible rescue by the Treasury there is bound to be a different attitude in the minds of those who work in it and those who manage it. The only reason why managers can manage successfully and why people will accept the disciplines of industry and, indeed, the unpalatable fact that often they cannot get the wage claims that they would like, or that they have to work hard, is that they have had great enthusiasm but also the fear that if they failed to do that, it would result in bankruptcy and, therefore, unemployment.
Once one says that certain companies and industries, whether in the public sector or the private sector, are to be supported with taxpayers' money, whatever people do, that attitude is changed and one has to rely entirely upon people's good will.
This is one of the things that have gone wrong with British industry, public and private. Heaven knows, it is a hard enough job to be an industrial manager. To run a private sector company with all the disciplines of the market is a very difficult thing. It requires great skill, patience, and hard work to do it well. However, it is infinitely harder to do it once that company is nationalised or is guaranteed the assistance of the taxpayer if it gets into trouble. It is certainly a job for professionals.
One of the most extraordinary things that the present Government have done is to believe that our erstwhile colleague from Newcastle upon Tyne, Central, would be expert at running a company in the public sector. I should like to hear a justification for that, just en passant. Here we have one of the most difficult tasks in our society. We should use people who have proved themselves to have the necessary skills and who have worked their way up through industry.
The reason why it is so much more difficult in the public sector is, first, the reason I have already given, that people's attitudes have changed, and, secondly, that the position of the managers in the industries that we are discussing would be greatly altered if they were the subject of Industry Act assistance. They could not say "No, I insist on a better manning schedule. I insist on harder work. I insist on disciplining you for not turning up on time. I cannot pay these wage claims". Everyone knows that that is not true and that if the worst comes to the worst, there is a tranche of money available under the Bill. Therefore, the job is infinitely more difficult.
What is more, the motivation of these people is changed. The motivation of those managers about whom we are talking would equally be changed as well. If they are running a private sector company, every pound that they can save out of their revenue is a pound that will go to them and to the shareholders, enriching them. The motive is there to force down costs as far as they can. It


is that motive that makes industry efficient.
However, if these managers are in the position of a public sector manager, the only way that they can better themselves and improve themselves is to have a bigger organisation. If one looks at the pecking order of the chairmen of our present nationalised industries, one finds that the chairmen who get the most are the chaps who have the biggest payroll, so the only way to get more money, if one is a public sector manager, is to try to get a bigger payroll. That is why we find that putting these industries into the public sector would have the effect of greatly increasing their costs and the number of people they employ, and of making them less efficient in every way.

Mr. Cryer: I have been following the hon. Gentleman's arguments. I am sure that he will accept that the 1972 Act is about assistance only, and that acquisition can be undertaken only with the consent of the companies concerned. Perhaps the hon. Gentleman would care to square his remarks. Would he care to repudiate, in the light of his remarks, the section on page 31 of the Conservative Party document "The Right Approach", which says,
There may be occasions when a Government has to intervene to assist a company in financial difficulties on strategic, or technological or other grounds.
Is the hon. Gentleman now saying that there are never any grounds, and does he repudiate that document?

Mr. Ridley: I would not go as far as to say that there are never any grounds. What I am trying to say is that in the generality the answer should be "No". The general answer should be "No". There will be companies which for defence, strategic or other reasons, or where there is some particularly sensitive reason, should be given assistance. But that is entirely different from the present situation, in which I would bet that the biggest 100 companies in Britain believe that if they get into trouble they will be rescued. I do not believe that there is one man running a big British company, or one trade union representing workers in a big British company, who does not have a fairly certain feeling that it would be rescued. That is what is

doing the damage and it is one of the reasons for our industrial decline.
Therefore, when the hon. Member for Bolsover talks about rolling on the frontier, my first reaction is that he simply wants to make the whole of British industry inefficient.

Mr. Skinner: It will happen anyway.

Mr. Ridley: The hon. Gentleman says that it will happen anyway. However, let us suppose that he had his way and rolled right up to the edge and over it, so that there was nothing left in the private sector, in the end, there must be a discipline, because there are no workers left on whom to live. There is no one lying around anywhere upon whom one can be parasitical, so we are all square again. What happens then with this Communist system of industrial management is that gradually little bits of it get returned to incentive, to the profit motive. With agriculture in Russia, all the time Russia is having to find incentives to motivate the people whose motivation she destroyed when they accepted Communist industrial régimes.
6.0 p.m.
Perhaps the hon. Gentleman is right and he will get his Eldorado and the public sector will be everywhere. I shall resist it, because I am interested in the standard of living of ordinary working people. I should like them to be richer. I do not like the Government who say that there is no more money for anyone, that there shall be misery for everyone and that all they want is nationalisation and State Socialism. That does not make anyone better off. It makes people worse off. The Government's target is to make people less well off. We are told of the marvellous achievement last year when the standard of living came down one or two points. That is Socialism working. My solution is that we should have twice the wages and twice the standard of living.

Mr. Skinner: Does the hon. Gentleman agree that he and people like him wanted Britain inside the Common Market because the Treaty of Rome was based upon the free movement of capital and labour, the free play of market forces and the enhancement of the private sector, which would enable Britain to trade


more effectively and give economies of scale in the private sector to produce a better standard of living for Britain? Is not the real answer that since we went into the Common Market in such a short period we have suffered the biggest decline in living standards and is not that one of the main reasons why we have these problems today? In other words, the private sector, Common Market attitude is milking the country dry.

Mr. Ridley: Other events have occurred since we joined the Common Market. One is the vast increase in the amount of money going to industrial subsidy. Another is the vast increase in the rate of inflation. The two are not disconnected. The heavy bill for industrial subsidy is one of the main reasons for inflation. Both the subsidy and the inflation have damaged industry. I do not think that the Common Market is to blame. It is the hon. Member for Bolsover and his lot, and the policies which they advocate, that have done the damage.
Another reason for supporting the amendment is that we cannot divorce debates on the economy, such as the debate we had 10 days ago when we were all saying that we must do something about the economy and save public spending, from debates on pensions, health or industry when we ask for more money to be spent. This group of amendments would slightly restrict the area in which public money could be spent.
If the Government are in earnest about wanting to restrain public expenditure, there is no conceivable reason why they cannot accept every one of these amendments. They would be doing a service to the country by restricting their ability to spend money and allowing the industries listed in the amendments to remain more efficient than they would be if they were taken over. They would also be doing a service for the reason given by my right hon. Friend the Member for Bournemouth, West (Sir J. Eden). If only the Government would signal to the world that they repudiate the hon. Members for Luton, West (Mr. Sedgemore) and Bolsover, the pound might go up in value and our recovery might start. That is why I shall vote for the amendments.

Mr. Richard Wainwright: The amendment brings to a crunch the difference in approach to the National Enterprise Board by the Conservative segment of the Opposition, on the one hand, and the Liberal segment of the Opposition, on the other. The Liberal Bench finds it impossible to support the Conservative amendment which has been selected for the vote.
The Liberals were very pleased when the Government bowed to the decision in Committee to exclude banking and insurance. Never at any time when we have advocated the National Enterprise Board have we considered that it should become a City of London institution—God forbid. The amendment for which I was happy to vote in Committee was admirable, and I am even happier that the Government accepted it.
The amendment we are considering today is a very different matter because it would constrict the National Enterprise Board in the exercise of the functions for which we have always maintained that a board of this kind should exist.
Where private enterprise for an understandable reason, not out of malaise or stupidity, has become too crippled to intervene to exploit a new technology, the function of the National Enterprise Board is to intervene, not necessarily in perpetuity, but to get a particular technology or invention propertly exploited.

Mr. Ian Gow: I think that the hon. Gentleman is on the wrong amendment. The amendments we are discussing have nothing to do with the National Enterprise Board. They have to do with the scale of financial assistance under the Act unfortunately passed by my hon. Friends in 1972.

Mr. Wainwright: The hon. Member for Eastbourne (Mr. Gow) cannot have been here earlier in our proceedings when it was pointed out forcefully from the Conservative Front Bench that the Bill enables more money to be injected into the National Enterprise Board. That is why I still maintain that it would be crippling to the National Enterprise Board. [Interruption.] I shall be glad to be corrected and released from a dilemma if those who are winding up the debate can make this clear.
As long as the whole industry is not nationalised—there is no suggestion of that in the Bill—and as long as the takeover is not compulsory, there should be nothing to shackle the Government in intervening where they discover, to Parliament's satisfaction, that a technology, device or valuable saleable product is not being adequately exploited by private enterprise and seems unlikely to be so.
It seems quite wrong that an attempt should be made to prevent the Government from taking over a small pharmaceutical firm which had gone to sleep on a product, perhaps its sole product, and where to secure the patents and other rights it would be necessary for the Government to intervene. To shackle the Government in that way is to go too far. Subject to the explanations which the Front Bench feels confident it can make, our intention is to vote against the amendment.

Mr. Nicholas Winterton: I declare not a personal financial interest but an interest in that more than 4,000 of my constituents work with pharmaceutical companies. ICI Pharmaceuticals and Ciba-Geigy (UK) Limited, both important companies and very good employers, operate within my constituency. It is extraordinary that Labour Members of Parliament who are members of the Labour Party National Executive and who feel so strongly on these matters are not present to participate in the debate. Perhaps parliamentary democracy is not their platform, and I hope that the country appreciates that fact.

Mr. Nicholas Fairbairn: Those Labour Members will be entertaining their guest whose job it is, according to his publications, to ensure that industry is no longer kept in private hands.

Mr. Winterton: I would be out of order if I were to take up that point, but I believe that the people of this country have made their views clear on that Soviet visitor.
In addition to the general political and economic arguments that can be advanced against the theory of nationalisation or State participation in industry, there are a number of specific points that apply to the pharmaceutical industry. I particularly

wish to direct my remarks to Amendment No. 5.
The compulsory acquisition of a pharmaceutical company by the National Enterprise Board or by any Government body during the present Parliament would mean the present Socialist Government breaking undertakings given in the White Paper "The Regeneration of British Industry". Even though this policy is suggested in the recent report published by the Labour Party on the pharmaceutical industry, it would constitute a serious breach of faith by the present Socialist Government.
The pharmaceutical industry by its very nature is not suitable for nationalisation or for State participation. No one pharmaceutical company has more than 7 per cent. of the value of sales to the National Health Service, and therefore the purchase of one or even a number of pharmaceutical companies could not have a significant effect on the cost of drugs to the NHS.
It is also suggested that a State-owned company could give a lead on reducing advertising. This matter has been in the news recently and the Department of Health and Social Security obviously considers it important. This is a superficial argument. The only effect would be to destroy the competitiveness of the State-owned company and thereby to decrease its earnings and its ability to carry out research without large injections of State aid.
It is argued that the acquisition of a pharmaceutical company would enable the Government to discover information about pharmaceutical costing and methods of operation. This is already known to the Government in regard to pharmaceutical companies because of the detailed financial returns which they make to the Department. It could possibly be said that the Department does not have enough information about foreign companies, but it is unlikely to gain any new information just because the Government own a British company, however small or large it may be.
The Government already exercise sufficient controls over the activities of the pharmaceutical industry, and this applies to British and foreign-owned companies. All aspects of safety and efficacy are controlled by what is recognised to


be one of the best systems in the world. Prices are controlled through a voluntary price regulation scheme, and there are sufficient powers to control advertising in existing legislation. We must remember that advertising of prescription products is restricted to doctors—who must be considered reasonably intelligent people, despite the claims of the Labour Party that they are unduly influenced by pharmaceutical companies. This is a tremenous slight on doctors who seem rarely to be consulted on their views about the activities of the pharmaceutical industry.
6.15 p.m.
I would go further and say that Government participation in the pharmaceutical industry would reduce confidence for further private investment in the United Kingdom industry. The present Government have done a great deal to reduce confidence in practically every sector of industry, and it would certainly not help confidence in the pharmaceutical industry if there were Government participation.
At present there is considerable foreign investment in the industry which provides many jobs and affords this country the opportunity to earn substantial exports. I hope that Ministers will pay tribute to the fantastic export record and performance of the pharmaceutical industry. That record has been founded on private investment and based on private research which has been extremely successful. Therefore, the introduction of unnecessary controls for purely political purposes would discourage the use of the United Kingdom as one of the major worldwide bases for pharmaceutical research and manufacture. Inevitably this would mean a reduction in the United Kingdom pharmaceutical exports and an increase in imports, and perhaps also lead to a reduction in the amount of employment it provides. In 1975 exports of pharmaceuticals contributed £370 million to the United Kingdom balance of payments. That is a fine record. Why should there be any need for Government intervention in any way whatever in this industry?
No State-controlled company or institution anywhere in the world has succeeded in pharmaceutical research and development and there is no reason to believe that this pattern will change in future. It is the competitiveness in pharmaceutical research that makes companies strive for greater discoveries for the

benefit of mankind. Even though a valuable contribution is made by State bodies, as I am prepared to admit, the significant developments over the last decades have been made by private industry. That is the message I want to get across to the Minister.
Any company acquired by the NEB would be bound to be tinkered with by the Government in trying out their pet ideas. This would seriously affect the company's profitability and it would become a drain on the taxpayer. But, more important, any pharmaceutical business in the United Kingdom is dependent on successful export performance. The United Kingdom represents only 3 per cent, of the world pharmaceutical market; this is an important point and I hope that it is not underestimated by the Government. Effort might well be diverted away from this area towards the implementation of Government schemes.
The question of nationalisation and Government participation was considered in depth by the independent Sainsbury Committee of Inquiry in 1967, and the reasons which it advanced against public ownership then are still true today. In paragraph 251 of its report the Committee said:
In the first place, the industry cannot be said to have failed to provide the people of this country with many medicines of great value.
I am sure the Minister would admit that that is true. I wonder whether the State-controlled economies of Eastern Europe and the Soviet Union can boast a single new drug which has been internationally recognised to be of great benefit. I do not believe the Minister will be able to instance one such country. I could go further, but I shall not do so because many other hon. Members wish to take part in this debate.
I speak in this debate not just as a member of the Conservative Party or as Member for Macclesfield but also for many people in every grade and sector of those companies located in my constituency, 99·9 per cent, of whom strongly oppose any State involvement in the British pharmaceutical industry. They have afforded to them by the company good wages, good prospects, good pensions, good conditions at work and excellent facilities after they have left


work. Those facilities are all provided because of progressive and successful company policies. Judging by the past record of Government involvement in industry, I do not believe that this enlightened policy could continue if the Government took a stake, large or small, in the pharmaceutical industry. If they do so, the precedent will be set and this country will no longer be the base of many international pharmaceutical companies for the carrying out of research and manufacture.
A great deal is at stake in these amendments. I fully support my colleagues who have tabled the amendments and I hope that the many absent Socialist Members who are at present away elsewhere will consider well what they are doing before they vote against them. My comments have been directed to one amendment, but a good argument could be made out for all the amendments on the Order Paper. We want no part of State intervention in successful industry. I say to the Government: keep your hands of.

Sir Anthony Meyer: I am sorry to see that the hon. Member for Bolsover (Mr. Skinner) and the hon. Member for Luton, West (Mr. Sedgemore) have left the Chamber, because I wanted to begin, like my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), by declaring an interest. My own very small stock of sterling is dwindling rapidly, and I observed on the tape that an article yesterday by the hon. Member for Luton, West had already removed 1·5 cents from the value of sterling. I can hardly wait to discover from the tape the further impact on sterling of the speech made by the hon. Member for Bolsover.

Mr. Tebbit: Wait till the Minister speaks.

Sir A. Meyer: I address myself to the very narrow point of Amendment No. 8. During the past weeks I have been devoting a good deal of time and energy to trying to ensure the continued survival of the small port of Mostyn, in my constituency. Like many other small ports throughout the country, it is absolutely vital to the prosperity of the wide hinterland which it serves. I know this to be

particularly true of a number of small ports in the West Country and in Scotland.
Despite the disagreements that we may have had across the Floor of the House in connection with this Bill, it is probably true to say that there has been a fair measure of good will and understanding about the Bill as it has travelled on its way—partly because of its ancestry. But certainly within the context of this measure, to talk about Government money for small ports is to conjure up an image of a fairy godmother who will come to the rescue of any small port that finds itself in distress. I fear that that fairy godmother may be the fairy Carabosse, bringing with her a poisoned needle that will send our small ports to sleep for 21 years—and perhaps a great deal longer.
In another setting—that of the Dock Work Regulation Bill—if the Labour Party, and particularly the Labour Members who sit below the Gangway, get their way, the prospect is a very desolate one indeed.
The hon. Member for Liverpool, Garston (Mr. Loyden) made it quite plain—he also made it quite plain that he expected Ministers to share his point of view—that the object of Labour Party policy and, as he would have it, the object of Government policy is to destroy the small ports because they prey upon the prosperity of the big scheme ports. It is quite clear that that is the object of the Dock Work Regulation Bill.
What I fear is a combination of the debilitating effect of the big stick of the Dock Work Regulation Bill, compelling the small ports to adopt working practices which have brought the great ports to somewhere near ruin, and the poisoned carrot of this measure, holding out the hope that the Secretary of State will come along with money bags in order to make good the ravages of the Dock Work Regulation Bill. I fear that this mechanism will separately and conjointly achieve the total destruction of these small ports, which are so vital to the welfare of many of our citizens. I speak at a moment when unemployment in my own constituency has risen to about 13·7 per cent, and looks like going higher still.
If, within this group of amendments, there had been a specific amendment


excluding the firm of Courtaulds from the operations of the Bill, I might have been rather in two minds about it. I confess to being somewhat schizophrenic about the operations of a firm headed until recently by a successful Socialist peer—so successful that he has been put in charge of our North Sea oil reserves. I reflect on the total lack of providence or far-sightedness shown by the management of Courtaulds in allowing this once great firm to get into a state in which it has to declare massive redundancies throughout the country, because of a total failure to foresee a change of demand that could have been been seen coming a mile off by any real entrepreneur.
But we are not dealing with Courtaulds; we are dealing now with ports and docks. If the Government wish to nationalise the ports, let them say so and bring forward a Bill to that effect. Let them not try to do so by first debilitating the operations of the ports by means of the Dock Work Regulation Bill and then coming along with bogus money bags in order to rescue the ports with poisoned money.
I shall have no hesitation at all, therefore, in supporting this group of amendments. I very much hope that these and other amendments will tighten the scope of the Bill in order to reduce the damage that it can do.

Mr. Tebbit: Our debates these days tend to be rather sad affairs. As I always understood it, the essential of a debate was that there were two points of view expressed—sometimes more—and that there was a discussion and perhaps even a meeting of minds. But day after day, in debate after debate, we find that there are Members present on only one side of the House and that, apart from a little squeak or two from the Minister, only one point of view is put forward.
I am particularly sorry that the hon. Members for Luton, West (Mr. Sedgemore) and Bolsover (Mr. Skinner) are no longer in the Chamber. Apart from anything else, I, like you, Mr. Speaker, remember the hon. Member for Bolsover when he came here—a sort of proud, bouncy and uppish young political virgin. But in his speech today he sounded like a poor old tired and raddled political camp follower, still protesting

his virtue—a virtue that no one wants to take from him.
At least the Under-Secretary of State, who is not here now, had the common sense to sell his political virtue while he still had something left to sell—while there was something attractive about him. He had not lost that sort of fresh innocence when he got on to the Treasury Bench, but he was losing it pretty quickly today, I must confess.
But since there is no one else here on the Government side, apart from the Minister, and we must have our debate on our own, we had best get on with it. At this stage I must declare my interests, as always. One is a rather individual interest, in that I work for the National Federation of Building Trades Employers, and civil engineering and building are mentioned in one of the amendments.
The other is a rather wider interest. I, like many people in this House and many people outside, am a member of a pension fund. What worries me is that as time goes on, unless the Government forswear any intention of nationalising the industries mentioned in these amendments—in other words, unless the Government go back on "Labour's Programme for Britain"—before long there will be very few investments available for pension funds to put their money into. Almost the only thing that a pension fund will be able to do will be to put its money into Government stocks—those things which in bygone days were called gilt-edged investments. That is an expression that we do not hear any more. Can you, Mr. Speaker, imagine anyone going to his broker now and saying" I want to buy a gilt-edged investment, and I had Government securities in mind"? Not many funny things happen on the Stock Exchange these days, but that might bring a smile to the broker's face.

Mr. Fairbairn: Many people believe that gilt-edged is now spelt "guilt-edged."

6.30 p.m.

Mr. Tebbit: My hon. and learned Friend may well be right. But the serious point that we have to consider is what pension funds will do in the future. Admittedly, at the moment, a yield of 15 per cent, or 16 per cent, sounds moderately attractive. With inflation running


at a mere 15 per cent., which I understand is a triumph of Government policy, I suppose that it is something just to hold it to the value of money. But, traditionally, the pension funds looked for investments which would appreciate and show a return in order that they might pay pensions to the members of the funds. If these industries go, too, what hope is there? There will be a narrower and narrower base of industry in which to invest. As my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) implied, there will be fewer and fewer host companies with more and more parasites to feed upon them. So I am especially worried from the point of view of a member of a pension fund. I hope that the Government have noted the difficulties which will face these funds in future.
After all, once a company is tainted with Government money and a Government shareholding, who in his right mind will invest in it, even if it is not nationalised outright? We know that, from there on, other considerations than the commercial ones will come into play. If a by-election arose, for example, the company might be told that it could not do what was thought commercially necessary because its operations affected a constituency where there was a Government party seat at risk. I do not say that, especially partially, of the present Government. Having found the neutrality of the Chair, Mr. Speaker, I am sure that you are even more aware than most that when an hon. Member refers to the Government he includes Governments of all persuasions. They have a great deal in common, and I do not trust any of them to a great extent.
As I understand it, at the moment the Labour Party is committed to the nationalisation of all the industries mentioned in the amendments. I understand that it is also still committed to the nationalisation of the banks, although the Prime Minister is not personally so. When the Under-Secretary—the hon. Member for Keighley (Mr. Cryer), in his new Front Bench job—emphasised how important it was to do what the unions wanted, he did not mention that the National Union of Bank Employees did not want to see their banks nationalised. Apparently, that is one issue on which

it is not necessary to consult the trade unions concerned.
We also have to consider whether, at this time, public funds should be used to acquire these firms or whether it would be better in every respect for this House, perhaps even with the support of the Government, to say "We want none of this. We shall not indulge in this nationalisation lark."
Can we afford to spend money on these acquisitions? I say "we" in a rather loose way, because we do not have any money. If we had any money, we should not be going to the IMF for more. So the money that would be used for the acquisitions is not our money; it is money that we hope will be given to us by our foreign creditors as a result of some form of grovelling or threat.
I ask hon. Members to consider the case of the pharmaceutical industry, which is one of those under discussion at the moment. There are substantial foreign holdings in that industry. I do not know that bankers abroad are overwhelmingly enthusiastic about being required to give us another tranche of money in order that their assets in this country can be nationalised and that we can then, having spent the money, go back and ask them for more.
Then we have other problems. The Government talk about investment—and certainly some of these industries need investment—but could one honestly advise anyone to invest in a company threatened with nationalisation? I do not want at this stage to go through arguments that will come up before long in this House about the compensation terms for industries at the moment under the threat of nationalisation. Suffice it to say that they are not such as would encourage anyone whose company was threatened with nationalisation to invest more shareholders' money in it.
Let us not worry about the other threats to investment. Who can make more than 15 per cent, on an investment these days? Who can hit MLR levels? To put on top of it this nonsense of the threat of nationalisation is just too much.
We talk a great deal these days of confidence, because of the problems of sterling. Too often, confidence is thought to mean only something quite narrow—the confidence of the dealers in money;


the confidence of the money market. But confidence is much more than that, and the sort of confidence that is lacking in this country is the confidence of an importer or an exporter in the port through which his goods may go. If he thinks that the port through which he wants to operate is under the threat of nationalisation, it will jaundice his whole outlook on his investment in that port.
Then there is confidence in a bank or in a finance house. Who, in all seriousness, would want to put his money in the Government bank on the record of what the Government have done with money in these past years? Certainly no foreigner wants to put his money into the Government bank. One or two of them say that it is a very good bank, that they have great confidence in it, and that it is a bank which should be supported. But, when it comes to the point, none of them is willing to put his own money in except in the last resort under the duress of threats such as a semi-withdrawal from our NATO commitment.
Would civil engineering contracts flow more freely if the civil engineering industry were nationalised? Would the Saudi Arabians or the Persians have more confidence in a nationalised engineering industry than they have in the present free enterprise one? I do not think that they would. They would rather deal with the companies that they know than feel that they were dealing with a firm at the back of which in the end were people like our two Under-Secretaries of State for Industry—the hon. Member for Keighley and the hon. Member for Nuneaton (Mr. Huckfield).
We have to ask whether the rejection of these amendments and the implication thereby that the Government are still intent upon the nationalisation of these industries would be good for our economy. Would it be good for industrial production? Would there be a sudden surge of confidence that the Government were committed to Socialism and that industrial production would thereby rise? After two and a half years of this lot's nonsense, industrial production is lower than it was during the three-day week. I repeat that for the benefit of the Minister of State, because I do not think that these facts always get through to him. Production is lower now and has been for some time than

it was during the three-day working week. That is the triumph of Socialism so far.
Will the record of other nationalised industries create a great surge of confidence? Will managers in the industries concerned say, "Hurrah, I am to be treated like Dick Marsh and Monty Finniston. I know where I am at last and I can confidently go ahead with a programme of investment"? Will they hell! Will it do anything to help unemployment, which is now two and a half times as high as it was when the Government came to office?
The record of the nationalised industries is a sad one. Almost without exception they have shed labour on a massive scale, yet because their markets have declined, they are still generally overmanned—certainly by the standard of their competitors abroad. As for sterling, I do not think that we need say anything more about that.
One other matter that particularly concerns this House is the issue of accountability. If these industries were taken into public ownership, how would their managements be accountable to their owners—that is, to the people of this country? We know already that there is not enough time for this House to discuss things which we feel are absolutely vital. We do not have time for debates on defence, foreign affairs or the economy, so we are told.

Mr. Fairbairn: Or law and order.

Mr. Tebbit: Or, as my hon. and learned Friend says, for law and order. How could we conceivably find the time, let alone the right machinery, to oversee the investment by the taxpayer in these companies?
We are familiar with the annual reports of the nationalised industries and they are a shabby joke. We are familiar with the valiant but totally vain efforts of the Select Committee on Nationalised Industries to probe what goes on in those companies and what happens to our investment. Time and again Ministers come to the Despatch Box or appear in the Statutory Instruments Committee, in one of those ludicrous one-and-a-half hour debates, when the vote at the end is meaningless, and casually say that they want to increase the borrowing requirement of a particular industry by a quick £400 million or so.
They appear with a scruffy departmental brief and with very little idea of what the money will be spent on. Any of us with any experience knows that if he turned up at a merchant bank in the City to make a case for £40, let alone £400 million, with the miserable lack of information with which this House is presented on these occasions, he would rightly be thrown out on his ear. If he tried to raise capital on the public market in a similar manner he would probably be jailed—and rightly so.
That is the final reason why we must encourage the Government to take the opportunity of repudiating the tendentious rubbish in "Labour's Programme for Britain" by supporting the amendments and showing clearly that, whatever the idiotic posturings of the NEC, the Government intend to run the country on some sort of sound basis.

Mr. F. P. Crowder: My hon. Friend said that we know all about sterling. I am not sure that we do. I found out something about it about 10 days ago when I was in Hong Kong. For an air edition of the Daily Telegraph, I had to pay the equivalent of 70p in Hong Kong dollars. That shows in the gentlest terms how sterling is regarded. I went into 11 shops and asked the price of everything and they gave the prices in Hong Kong dollars or US dollars. I said to them "But this is a British colony"—

Mr. Speaker: Order. I did not call the hon. and learned Member to make a speech; three other hon. Members have been seeking to catch my eye. Perhaps the hon. Member has now made his point to his hon. Friend.

Mr. Tebbit: I am grateful to my hon. and learned Friend. All that I would say about sterling is that it stood at $2·30 when the Government came to power and it is now $1·57 and sinking fast. T hope that the Minister makes a short speech tonight. If he makes a long one he may knock another couple of cents, off the exchange rate before he sits down.

6.45 p.m.

Mr. Anthony Nelson: My hon. Friend the Member for Chingford (Mr. Tebbit), in his customary manner, has dealt eloquently and energetically

with the case for all the amendments. He undermined considerably the case that we have heard so often enunciated by Labour Members for massive increases in the level of financing of public enterprises. Like my hon. Friend, and my hon. Friend the Member for Macclesfield (Mr. Winterton), who spoke so pertinently about the threat to the pharmaceutical industry without the amendments, I have strong constituency interests in their being passed. I have constituents employed in every one of the industries named in the amendments and I should be surprised if that were not true of other hon. Members on the Opposition Benches.
It is a matter of great regret that sufficient accountablity for the massive financing provided by the Bill and similar Acts has not been provided and that, on the few occassions when we have been able to discuss these matters, it has been on the basis of wholly inadequate information and too little time to do justice to the arguments for and against any Government proposition.
The Government have the nerve consistently to suggest that in some mystical way the Conservative Party is responsible for the legislation that they are now presenting and for the levels of expenditure that they are now making in the public industrialised sector—that, in some way, the Conservative 1972 Industry Act bears some similarity to the whole paraphernalia of their industrial legislation.
That Act has been entirely emasculated by many of the amendments made by the 1975 Industry Act, and the further extension in monetary provision under this Bill will have exactly the same consequence. Let us consider the figures applying under Section 8 of the 1972 Act and the industries that are mentioned in these amendments. A total provision of £550 million would be increased to about £1,600 million—a massive increase in the scale of public finance and therefore of taxpayers' liability which may be provided as unprofitable public investment in the industries mentioned in the amendments. How can this possibly be desirable when no adequate criteria are adopted and when even the criteria for the National Enteprise Board, which has a similar role, are still only in draft?
I wish to make a few remarks about Amendment No. 7, which deals with


finance houses, merchant banks and hire-purchase companies. I find extraordinary the changing attitude among Labour Members, with a large proportion of them—a majority I am sure—supporting proposals for the nationalisation of commercial banks and a merchant bank, as proposed by the national executive committee.
My hon. Friend the Member for Chingford mentioned the attitude of the National Union of Bank Employees. I have the impression—having had experience of the banking industry myself, that the vast majority of bank employees are against nationalisation of the banks and, indeed, of the merchant banks. I wholly regret, and put on record my strong objection to, the abstention by the NUBE at the last TUC conference in the vote on the nationalisation of the banks. The NUBE absolved itself from responsibility on a critical issue which would affect a substantial number of its members. This is equally pertinent to Amendment No. 7, which specifically mentions merchant banks, as many of their employees are members of NUBE.
It is wrong for hon. Members on either side of the House to reduce the argument to one of details. It is nothing of the kind. The proposals put forward in the NEC document were essentially philosophical and ideological. While they must be argued, and argued against, by showing the contribution that merchant banks, the banking system and other financial institutions make to the economy, we must recognise that in a political forum we are essentially dealing with a political and ideological problem. The Left and the Labour Party in general strongly hold to the basically Marxist or neo-Marxist theory that control of the private sector of industry and productive resources is essential for effective control over the economy. The Keynesian view, which I suspect and hope most hon. Members on the Opposition Benches hold, is that such ownership and control is not necessary when macro-economic control can be exercised through the deflationary and reflationary policies that various Governments may adopt.
However, I accept—and this is a point of admission to those who hold Marxist views—that the degree of gearing or

borrowing by companies may upset that theory, in that companies with substantial borrowings must pay interest in bad times as well as good. That includes merchant banks and many of the industries mentioned in the amendments. They are not, therefore, so susceptible to Government policies and therefore to Keynesian economics.
The essential point is that we cannot see the case for increasing political control or rectifying our economic ills by substantially increasing the size of the public sector, or by letting it move into strategic areas such as merchant banks, finance houses and hire-purchase companies. We feel strongly that such moves, which would be facilitated by the defeat of the amendment, would act against the interests of depositors. Ordinary people who, through the medium of insurance companies and pension funds, have a vested interest in the security of their deposits, would inevitably be affected if the attitude and intentions of hon. Members such as the hon. Member for Bolsover (Mr. Skinner) were adopted. Funds would be diverted into the less profitable and less commercial enterprises and industries, and therefore the security and return to depositors would be affected.
Many members of the public, including many of my constituents, have an underlying fear that Government control of the banking system, extended into hire purchase and the merchant banks, would inevitably mean that the Government would have totalitarian control. A cross-information process would allow them, for example, to ascertain for taxation purposes the size of people's income and many other personal details which at present are not wholly available to the Government but are a matter of private but legally-required disclosure. Such fears are expressed by ordinary members of the public. The passage of such an amendment would go a long way to back up the denials that the Government have made about the proposals of the NEC and members of the party for the nationalisation of the banks.
The object must be to restore the confidence and profitability of industry if we are to see investment in the sectors and industries set out in the amendments. We must provide for a period of stability.
What is needed is not only the prospect of making a reasonable return and confidence to invest money but a political consensus that companies will be allowed to keep that return and that conditions will not change over a medium period.
Many Labour Members point to the Conservative Government of 1971 and say "You made tax cuts to give industry an opportunity to invest and it did not". That is a fair criticism. Industry did not invest. The Government have tried a different way, but industry is still not investing. Perhaps we should be trying to move towards a modus vivendi—consensus of political opinions where concessions or compromise will at least allow a longer period of security for industry to undertake investment on a profitable basis—a basis of a return assured by all political parties. So long as an ideological gulf exists between the parties, so long as we have the sort of pronouncements made by the hon. Members for Bolsover and Luton, West (Mr. Sedgemore) today, so long will our economic performance be below that of our industrial competitors.
The subject of Amendment No. 7, which refers particularly to merchant banks and financing institutions, has rightly been recognised by the Prime Minister as a political albatross. This is surely an albatross that must not be allowed to fly. I commend the amendments to the House.

Mr. Fairbairn: I begin by declaring a simple interest—the share of the bill that my constituents pick up, which is £1,600,000 a year. For the most noble cause on earth all the professional money-raisers in Europe would find it impossible to raise that sum in Kinross and West Perthshire. Let us not forget the scale of the funds to which the Government, by this Bill, are committing my constituents. When Governments use these enormous figures I wish that they would more often relate them back to human beings, on whose behalf they are allegedly being used and from whose resources they are allegedly being raised.
There is a fundamental difference between the man who is spending his own money and the man who is spending someone else's. I saw it last week when I asked members of the British Council and

the Arts Council whether they would have spent one sou of their own money on the things on which they were spending thousands of pounds of other people's. The answer was always "No". The same applies when the Government spend vast sums of money in industry for political reasons. That is what the Bill is all about.
If the Government make a bad investment from the funds for which they are are asking it makes no difference. If they make a good investment it probably makes little difference. The psychology is not sufficiently appreciated. It is that of a man who takes an exam that he cannot fail. If this company loses money he can go to the Government for support. If his company gains money he gets no benefit from that. It is an exam that one cannot fail.
The psychology is also the same as that of a lawyer who says "It does not matter whether I get the drop off at first instance because the case can go to appeal. If that fails we can go to the House of Lords, and if that fails he can always get a Queen's Pardon." If we have that attitude in industry an attitude which Government support constantly engenders—the whole motivation and basis on which profit, wealth and investment depend is lost.
During the recess no less a person than the Chancellor of the Exchequer came to my constituency, staying at what he would call the Russian end of Loch Tay, at the Kenmore Hotel. He went into the little shop in Kenmore to buy various things—he could not go to the Co-op, because there is only one shop there. When he felt for his wallet, he said to the shopkeeper "I am terribly sorry, I have forgotten my money. I shall have to borrow some from my wife." The shopkeeper replied "That may be the way you think you can run the country, but it's no' the way we do business here." That is the way in which this sort of Bill makes people think. They think that they can run industry, and it does not matter if there is no money to do it because the Government will always provide at the end of the day.
I shall read to the House some words that are fairly topical at the moment:
Economic power is the key to political power. The economy is the main battlefield


for the victory of the revolution. State takeovers of the banks, the insurance companies, and private firms will deprive the opposition parties and the middle classes of their means of resistance. Inflation and taxation can then be used to grind the class enemy into the ground.
These are the words of Mr. Ponamaryov, written in "The World Situation and Revolutionary Process" and published in the World Marxist Review 1974. It is no coincidence that this Government want to do exactly what he says in order to pave the way for a Marxist victory.

7.0 p.m.

The Minister of State Department of Industry (Mr. Alan Williams): In the absence of our Liberal colleague, I welcome his speech as the one constructive contribution that we have heard from the Opposition Benches this afternoon. The official Opposition have spent the afternoon in much the same way as they spent the Committee stage, inventing demons and pursuing them round the Chamber. Everyone who reads their speeches, or who was ill advised enough to sit and listen to them, would think that the Bill is about nationalisation, but of course it is not. It is about assistance. I understand that the Opposition are playing little political games in advance of the by-elections, because they must know that shares cannot be acquired without the consent of the firms that own them. Therefore, there is no question of nationalisation.

Mr. Tom King: The Minister of State was not here at the beginning of our debate, and we understand why he was not able to be present. But it takes a certain nerve to criticise in quite such an irrelevant way speeches which he did not hear.

Mr. Williams: I am sure that my criticism was justified on the basis of the speeches I did hear. Shares cannot be purchased without the consent of firms; therefore, most of the arguments that we heard this afternoon were irrelevant to the basic issues which we should be facing.

Mr. Tebbit: I am grateful to the Minister for giving way. When he reads what he just said he will find that he made a Freudian sort of statement. He suggested that our interest in deploying arguments

about nationalisation was concerned with the forthcoming by-elections. Does he think that nationalisation is a subject that should not be spoken of at the time of by-elections, for fear that the Labour Party will lose if people think it intends to indulge in further nationalisation

Mr. Williams: Nationalisation is one of the big pieces of demonology which seems to obsess the Opposition, and it is being raised in an election atmosphere. I assume that is why we have listened today to such sustained irrelevancies, because this Bill is not about nationalistion. The requirement for consent was in legislation brought forward by the Conservatives when they were in office. Therefore, I assume that hon. Members opposite are fully aware of this fact.
The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) made a typically entertaining speech. His contributions in Committee were one of the most lively elements, and they helped to sustain us over the long-drawn-out proceedings. He said that he believed that people's attitudes changed when a company was assisted. That is his personal evaluation. I question whether attitudes changed in regard to Rolls-Royce, for example. This was a case of nationalisation undertaken by Conservatives. The aircraft industry also had considerable contact with Government funds in the whole of the post-war period, but I cannot see that that noticably altered anyone's attitude in the way the hon. Member has suggested.
The hon. Member for Chichester (Mr. Nelson) said that he thought there should be a consensus. I agree with him. It would be highly desirable. At one stage in Committee I began developing this line of approach and suggesting that there should be a drive towards consensus, but I was diverted by Conservatives who did not wish to pursue the matter at that stage. The hon. Member repeatedly referred to the fact that investment has been low under both Governments. When his Government came into power, because they would not agree to the consensus approach and undid dogmatically and doctrinally the industrial assistance policy that was in existence at the time, investment fell, and it never rose in the whole time they were in office to the level at which it stood when they came to power. I think that the public want to see more


consensus, just as they did in those days, because the Conservatives subsequently had to back-track and reintroduce grants, having disposed of them. This created the downturn in investment from which we have never fully recovered. Also, Conservatives clearly ignore the fact that we have lived through the worst recession since the war, and that was expected to have a certain impact on levels of investment.

Mr. Heseltine: Perhaps the Minister will explain why manufacturing investment rose substantially in 1972 over 1971, and subsequently again in 1973 over 1972.

Mr. Williams: Because it was trying to get back to the level it had been at in 1970. It was because hon. Members opposite, who purport to know so much about public expenditure, had the printing presses running under their Chancellor, that they had to do an about-turn in economic policy, with disastrous results. I do not want to engage in a general economic debate at this stage, as I know I would be quickly called to order.
The hon. Member for Chingford (Mr. Tebbit) suggested that once a company was tainted with Government money no one would invest in it. I am told that shares in BP do quite well on the market, and that the company does not have any great difficulty in raising capital. It is a nice debating phrase to use, but the hon. Member knows that as a general truth it is not supportable.
The hon. Member for Flint, West (Sir A. Meyer) wants to save a small port in his area, and he used this as an illustration. Obviously I cannot get involved in particular issues like that. The hon. Member spoke of the government's being portrayed as a fairy godmother with a poisoned needle. Presumably, then, he would prefer to condemn ports or firms to the slower death of financial starvation. Presumably he would gladly preclude his port or others, or a particular firm, from this kind of help, even if it were conceivably the only help available. I am surprised about that, knowing how much he has the interests of his constituents at heart.

Sir A. Meyer: Of course the case could be made out for financial help for any particular firm or undertaking. However, when there is the accumulation

of these one arrives at a situation in which none of them becomes viable.

Mr. Williams: That is the sort of ambivalence that we find in the Conservative policy statement. There is of course, the built-in caveat that there are some instances which are exceptional, but they do not spell them out, thus leaving a complete escape route. The Conservatives know that if they were in office and were faced with the same industrial situation they would pursue the same policies.
There is no intention of nationalisation in this Bill, and we would require consent before there could be any acquisition.
The hon. Member for Macclesfield (Mr. Winterton), who brandished verbal clubs robustly throughout our Committee proceedings, has nobly volunteered his constituents to be excluded from help under this legislation, even if, at some time, they may need it. No doubt in Macclesfield they will be ringing the bells tonight and saying "What a good Member we have, he has said that because of his political purity we shall not have help even if we need it at some time."

Mr. Nicholas Winterton: They will not need it.

Mr. Williams: The hon. Member was making a point about a firm in his constituency and I am glad to hear of the good conditions existing there. I wish the firm well. I also wish that other firms could be as successful. Not all firms are in the same position. Some firms in the same industry may not even be in the same position. In that event, as the hon. Member for Colne Valley (Mr. Wainwright) said, it may be reasonable to pursue the option which the hon. Member seeks to exclude.
The hon. Member for Macclesfield spoke of inward investment. We welcome inward investment. Indeed, 20 per cent. of our manufacturing industry is overseas-owned. I spend a large part of my time trying to persuade foreign business men to invest further in this country—[Interruption]. The hon. Member for Bridgwater (Mr. King) has to make a quick comment about that. I would have thought that this was the sort of thing that all parties would


support. We all want inward investment. All Governments have been consistent in ensuring that overseas investors are treated on the same basis as domestic investors.

Mr. Tom King: I could not agree more with what the Minister has said. We on the Conservative side of the House desperately hope that the inward investment position will improve. The hon. Gentleman has said that all parties want inward investment. If he looks below the Gangway and considers the policies of some of his colleagues—who are apparently members of the same party—on such matters as nationalisation, and considers their attitude towards multinationals, can he honestly say that such policies assist in obtaining inward investment?

Mr. Williams: The hon. Gentleman does my hon. Friends an injustice. It is quite legitimate to say, as the OECD has said, that while multinationals can be desirable as international guests in a country, they also bring problems, and consequently controls are needed. It is for that reason that the United Nations is now working—[Interruption.] I am sorry that the hon. Member disdains the United Nations. It is an interesting insight and to some extent, it depreciates any comments he makes. It is clear that he is not interested in serious discussion. Even the United Nations has now undertaken an analysis of the problems created by transnational companies. Far from this being a Machiavellian Marxist plot, as seems to be suggested by some Tory Members, it is a matter of widespread international concern—so widespread that even the Americans welcomed the OECD recommendations. They will be taking part in discussions in the United Nations.

Mr. Tom King: I do not know whether the hon. Gentleman spends any time, as I have done, trying to encourage overseas firms to invest in this country. The simple fact is that the activities of his hon. Friends are a positive block to that investment. If he has not had that experience he cannot really be doing his job and trying to encourage investment.

Mr. Williams: I can only say that I have been happy with the discussions that I have had with foreign business men.

Mr. Tom King: Who are they?

Mr. Williams: There are some very substantial names. The hon. Member knows quite well that when a Minister meets a board and undertakes preliminary discussions with major international companies concerning investment that may run to over £100 million, he cannot publicly declare the names before the companies are ready.

Mr. Tom King: When will the Minister announce the names?

Mr. Williams: When the companies are willing for us to do so. I am not in the habit of fabricating comments in the House, any more, I am sure, than the hon. Member is. I am sure that he will accept that.
The important thing is that in three sectors covered by the amendment—civil enginering, ports and inland waterways, and road haulage—there are 1,600,000 people working. Tory Members will troop into the Lobby in a few moments in an attempt to preclude all of those people, many of whom are constituents of theirs, from receiving assistance at a time when it might legitimately be needed.

Mr. Nicholas Winterton: Will the Minister accept that there are other more positive ways of encouraging successful business, and that the State handout is inclined to encourage the wrong kind of business? Does he realise that high taxation too often penalises the successful company? Would not a reduction in corporation tax be a successful way of encouraging good companies?

Mr. Williams: The hon. Gentleman is almost implying that the only method to be used by the Government is that of acquisition. I have said that this is, if anything, an exception, and can arise only with the consent of the firm. Let me give a simple illustration. There could be a firm which is basically quite viable but wrongly geared in its capital structure. It requires certain assistance. Government participation by way of a shareholding could alter the gearing and give the company the facility to borrow from private sources in the market. That can be the most sensible and cheapest way of giving assistance. It is a perfectly normal market consideration.
7.15.
This Bill is not about nationalisation; it is about acquisition, where it occurs, as one option with consent. It is keeping that option open and giving a discretion. The bitterness on the part of Tory Members is not aimed at the Government side of the House. The Tories get worked up about this legislation because they feel a sense of betrayal in that it ever reached the statute book. In Committee we had the incredible revelation from the hon. Member for Circencester and Tewkesbury—who at the time when the original legislation was being prepared was an Under-Secretary of State in the Department of Trade and Industry—that as a Minister he was not even aware that the measure was being prepared in his Department. As far as we could gather, this was on the express instructions of the then Leader of the Conservative Party.
I see the right hon. Member for Knutsford (Mr. Davies) present in the Chamber. He was Secretary of State at the time. At that time a colleague of Tory Members, Frederick Corfield, whom many of us recollect as being involved with aerospace functions, felt impelled to write to The Times saying that several Ministers in the Department were deliberately and expressly excluded from knowledge of the fact that the legislation was even being prepared. They were deliberately kept in ignorance and almost certainly presented with misleading briefs by their civil servants. That is why Tory Members are so bitter—because they were betrayed by their party. Now they are venting their spite, regardless of whether it will hurt their constituents, on a piece of legislation that they know is needed. They realise that its objectives are sensible.

Mr. Grylls: The Minister's speech is to be commented upon for one thing, namely, that he has read the amendments carefully. He talked to us about the road haulage contractors being worried that they could not have any assistance from the Government. If he reads the amendments he will see that we are talking about the acquisition of the companies listed, and not any assistance given to them. I suggest that the 1,600,000 people the Minister mentioned would be greatly relieved to know that if the amendment is approved, as it will be, their firms will

not be nationalised. Far from their being angry, I would expect them to be pleased. It is odd that the Minister should admit that he has not read the amendments.
They apply to the ports, the pharmaceutical companies and the road haulage companies. We are talking of acquisition. That was never the intention of this Bill or the 1972 Act. This has been a strange debate because there have been only two speeches from the Government side—

Mr. Alan Williams: Is the hon. Gentleman saying that he sees acquisition as being 100 per cent., and further, if it is anything less than 100 per cent., he is in favour of it? Some of his hon. Friends might find that they are not in step with him if that is what he is saying.

Mr. Grylls: I did not say that. We were talking about the Government taking over companies. I was drawing a perfectly clear distinction. We have made it clear in the amendments that these companies are to be excluded from acquisition, and that is the point.

Mr. Alan Williams: The hon. Member is saying that we have misunderstood what is meant by acquisition. By that term does he mean the Government getting control of a company or does he mean the purchase of 100 per cent. of a company? I think that his hon. Friends are thinking completely differently from him. Some of them would think that the purchase of even one share was an error of policy.

Mr. Grylls: We are talking about control of a company, and in normal terms that means acquiring 51 per cent. of it. We are not talking about assistance. It was perfectly clear in the original legislation that there was not to be more than a 50 per cent. takeover under the Act.
There has been no great enthusiasm for this debate from the Government side. We have heard two speeches from Government Back Benchers. The hon. Member for Bolsover (Mr. Skinner) was interesting. He said that it did not matter what happened with this Bill because everything was going the way he wanted. We were gradually sliding towards State control, and, therefore, he was not worried. The hon. Member for Luton, West (Mr. Sedgemore) inquired about the National Enterprise Board. He said that it did not matter what happened under


the Bill because the NEB could take these things over anyway.
The Government should realise that we have been trying to help. The Prime Minister has made perfectly clear that the banks and insurance companies are not to be taken over. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) was seeking in his original amendment to help the Government, and the Government were right in not trying to reverse that amendment. As soon as the threat of take over hangs over an industry confidence in it sinks very fast indeed. My right hon. Friend the Member for Bournemouth, West (Sir J. Eden) in an excellent speech, in which he drew on his experience of industry, made clear that once the threat emerges investment comes to a full stop.
We are delighted that the Government accepted the amendment in Committee, but we are sorry that they have not gone a little further, because the ports, road haulage and the pharmaceutical companies are most important to this country.
We should recall the Private Bill on Felixstowe docks. The Lords came down in favour of the people who work in that industry and they kicked the Bill out. They came down in favour also of the shareholders who voted against nationalisation.
Much the most important part of this political battle is to ensure that investment in the industry continues. As my hon. Friend the Member for Flint, West (Sir A. Meyer) said of his own port of Mostyn, it is important to maintain our small ports, and it is important to maintain investment in them. We would wish to back my hon. Friend in everything that he is doing to see that his port thrives, and to remove the threat of State control. We would be happy, therefore, if the Government would at least accept that amendment.
We then come to the pharmaceutical companies. My hon. Friend the Member for Macclesfield (Mr. Winterton) drew on his experience of companies in his constituency and made the case for their staying as private enterprise firms. They have thrived as such. They have invested, they have exported, and they have done all the things that the Government have told industry to do. What is the reward for all this hard work? It is to

be threatened with take over. I hope that the Government will accept the amendment relating to this sector, because the Chancellor of the Duchy of Lancaster promised on 19th May this year that there was to be no nationalisation of pharmaceutical companies. If that is the case let us equate acquisition with nationalisation and hope that this amendment can be accepted. Presumably for the hon. Member for Luton, West the amendment would not embrace acquisition by the NEB.
The hon. Member for Colne Valley (Mr. Wainwright) said that he was opposed to selective nationalisation, but I think that we could be on common ground here. That is what we are opposed to, and I am sure that he is, therefore, against any form of acquisition under the Industry Act 1972 or in any other way.

Mr. Richard Wainwright: I am sorry that the hon. Member did not hear the whole of my speech. Will he confirm that it is one of the objectives of Amendment No. 5 to prevent the Secretary of State from giving specific grants for the acquisition of any pharmaceutical company?

Mr. Grylls: That is certainly true.

Mr. Richard Wainwright: It is on that basis that I oppose his amendment, because I do not wish to shackle the NEB.

Mr. Grylls: I think that there is a confusion here. We are not talking about the NEB but about using the Industry Act. Earlier the hon. Member spoke about the NEB, but this subject is distinctly different. The Industry Act was a modest measure introduced by the Conservative Government to give to industry selective help where it was needed. It was never intended that that Act should be used for nationalisation. I hope that the hon. Member, whose thoughts on industry I follow carefully, and to whom we listened in Committee with great interest, will agree on that point.
The Minister of State declared that the 1972 Act was our Act. There is, however, one major difference. When we were in Government £6 million was spent under the Section 8 procedure during


the 18 months before the February 1974 election. We are now talking about the expenditure of more than £1,000 million under that procedure. The Act has, therefore, been completely transformed. That is why we want to impose firm restrictions in the Bill, to ensure that it will not be used for nationalisation purposes.
My hon. Friend the Member for Chingford (Mr. Tebbit), referred quite rightly to consultation with the bank employees. We are told that there should be participation, and that is correct: one should try to do what the people in the industry want. He made it clear that the consultation so far had shown clearly that the employees wanted nothing to do with nationalisation. Therefore, to the extent, at least, that the Government are accepting the amendment, we are on common ground.
The great mass of people in this country do not want more nationalisation. That puts the Government in a difficult position, because hon. Members below the Gangway opposite want more. The Government know that if they go to the country on a nationalisation platform they will lose. A purely cynical party politician would say that it would be a good thing if the Labour Party went to the country on the basis of nationalising the banks, the insurance companies and everything else. That would be a bonanza for us, but not for the country.
It would be a tragedy, because all the polls show that people do not want full-scale nationalisation. I believe that is because the majority of people see the grim, grey brutality of life in countries where nationalisation is the order of the day. Our people have looked across the Iron Curtain and seen what it is like

working in those nationalised industries. It is bad enough in this country with so much nationalised industry. People can imagine how restricting it would be if all industries were nationalised.

7.30 p.m.

With the exception of hon. Members below the Gangway opposite, most people accept that real progress has been made in countries such as France, Germany and Japan where private enterprise has modernised and been allowed to go ahead. By the amendments we are seeking to preserve the right of modern free enterprise to move ahead and adjust to the modern day.

May be there is some hope. According to the newspaper headlines tonight there is a moderate backlash in the Labour Party; a counter-offensive by the Manifesto Group to rescue the country from the financial peril into which this incompetent Government have led us. The hon. Member for Thornaby (Mr. Wrigglesworth) has apparently said that the Manifesto Group is reading the mood of the country better than his colleagues in the left wing of the party and on the EEC.

I believe that we are reading the mood of the country aright in asking the Government to accept the amendments and to preserve free enterprise and let it grow. If the Government have the sense to accept the amendments, industry can go on investing and expanding, and the workers and the country will be better off.

Question put, That the amendment be made: —

The House divided: Ayes 179, Noes 203.

Division No. 353.]
AYES
[7.32 p.m.


Adley, Robert
Buck, Antony
Dodsworth, Geoffrey


Arnold, Tom
Budgen, Nick
du Cann, Rt Hon Edward


Atkins, Rt Hon H. (Spelthorne)
Bulmer, Esmond
Dykes, Hugh


Awdry, Daniel
Burden, F. A.
Eden, Rt Hon Sir John


Bell, Ronald
Butler, Adam (Bosworth)
Elliott, Sir William


Bennett, Sir Frederic (Torbay)
Carlisle, Mark
Emery, Peter


Bennett, Dr Reginald (Fareham)
Channon, Paul
Eyre, Reginald


Benyon, W.
Clark, Alan (Plymouth, Sutton)
Fairgrieve, Russell


Berry, Hon Anthony
Clarke, Kenneth (Rushcliffe)
Farr, John


Bitten, John
Clegg, Walter
Fell, Anthony


Boscawen, Hon Robert
Cooke, Robert (Bristol W)
Fisher, Sir Nigel


Bottomley, Peter
Cope, John
Fletcher-Cooke, Charles


Boyson, Dr Rhodes (Brent)
Cordle, John H.
Fookes, Miss Janet


Braine, Sir Bernard
Costain, A. P.
Forman, Nigel


Brittan, Leon
Craig, Rt Hon W. (Belfast E)
Fowler, Norman (Sutton C'f d)


Brown, Sir Edward (Bath)
Crowder, F. P.
Fox, Marcus


Bryan, Sir Paul
Davies, Rt Hon J. (Knutsford)
Fry, Peter


Buchanan-Smith, Alick
Dean, Paul (N Somerset)
Gorst, John




Gow, Ian (Eastbourne)
Macfarlane, Neil
Ridley, Hon Nicholas


Gower, Sir Raymond (Barry)
MacGregor, John
Ridsdale, Julian


Grant, Anthony (Harrow C)
Madel, David
Rifkind, Malcolm


Gray, Hamish
Marten, Nell
Rippon, Rt Hon Geoffrey


Griffiths, Eldon
Mates, Michael
Roberts, Michael (Cardiff NW)


Grist, Ian
Mather, Carol
Roberts, Wyn (Conway)


Grylls, Michael
Maude, Angus
Rost, Peter (SE Derbyshire)


Hall, Sir John
Mawby, Ray
Sainsbury, Tim


Hall-Davis, A. G. F.
Maxwell-Hyslop, Robin
St. John-Stevas, Norman


Hamilton, Michael (Salisbury)
Mayhew, Patrick
Scott, Nicholas


Hampson, Dr Keith
Meyer, Sir Anthony
Shaw, Giles (Pudsey)


Hannam, John
Mills, Peter
Shepherd, Colin


Havers, Sir Michael
Miscampbell, Norman
Silvester, Fred


Hayhoe, Barney
Mitchell, David (Basingstoke)
Sims, Roger


Heseltine, Michael
Moate, Roger
Speed, Keith


Hicks, Robert
Molyneaux, James
Spence, John


Holland, Philip
Moore, John (Croydon C)
Sproat, Iain


Hordern, Peter
More, Jasper (Ludlow)
Stanbrook, Ivor


Hunt, David (Wirral)
Morgan, Geraint
Stanley, John


Hunt, John (Bromley)
Morgan-Giles, Rear-Admiral
Steen, Anthony (Wavertree)


Hurd, Douglas
Morris, Michael (Northampton S)
Stewart, Ian (Hitchin)


Hutchison, Michael Clark
Morrison, Charles (Devizes)
Stradling Thomas, J.


Irving, Charles (Cheltenham)
Morrison, Hon Peter (Chester)
Taylor, R. (Croydon NW)


James, David
Mudd, David
Taylor, Teddy (Cathcart)


Jessel, Toby
Neave, Airey
Tebbit, Norman


Johnson Smith, G. (E Grinstead)
Nelson, Anthony
Temple-Morris, Peter


Jones, Arthur (Daventry)
Neubert, Michael
Thatcher, Rt Hon Margaret


Jopling, Michael
Nott, John
Townsend, Cyril D.


Kilfedder, James
Oppenheim, Mrs Sally
Trotter, Neville


Kimball, Marcus
Page, John (Harrow West)
Tugendhat, Christopher


King, Evelyn (South Dorset)
Page, Rt Hon R. Graham (Crosby)
van Straubenzee, W. R.


King, Tom (Bridgwater)
Paisley, Rev Ian
Vaughan, Dr Gerard


Kitson, Sir Timothy
Parkinson, Cecil
Wakeham, John


Knight, Mrs Jill
Pattie. Geoffrey
Wall, Patrick


Knox, David
Percival, Ian
Warren, Kenneth


Lamont, Norman
Powell, Rt Hon J. Enoch
Weatherill, Bernard


Lawrence, Ivan
Price, David (Eastleigh)
Wiggin, Jerry


Lawson, Nigel
Pym, Rt Hon Francis
Winterton, Nicholas


Le Marchant, Spencer
Raison, Timothy
Wood, Rt Hon Richard


Lewis, Kenneth (Rutland)
Rathbone, Tim



Lloyd, Ian
Rees, Peter (Dover &amp; Deal)
TELLERS FOR THE AYES:


Luce, Richard
Rees-Davies, W. R.
Mr. John Corrie and


McCusker, H.
Renton, Rt Hon Sir D. (Hunts)
Mr. Jim Lester




NOES


Abse, Leo
Cralgen, J. M. (Maryhill)
Grimond, Rt Hon J.


Allaun, Frank
Crawshaw, Richard
Hamilton, James (Bothwell)


Anderson, Donald
Cronin, John
Hardy, Peter


Archer, Peter
Crosland, Rt Hon Anthony
Harper, Joseph


Armstrong, Ernest
Crowther, Stan (Rotherham)
Harrison, Walter (Wakefield)


Ashley, Jack
Cryer, Bob
Hatton, Frank


Ashton, Joe
Cunningham, G. (Islington S)
Heffer, Eric S.


Atkins, Ronald (Preston N)
Davidson, Arthur
Hooson, Emlyn


Bagier, Gordon A. T.
Davies, Bryan (Enfield N)
Horam, John


Barnett, Guy (Greenwich)
Davies, Denzil (Llanelli)
Huckfield, Les


Bates, Alt
Davies, Ifor (Gower)
Hughes, Rt Hon C. (Anglesey)


Bennett, Andrew (Stockport N)
Deakins, Eric
Hughes, Robert (Aberdeen N)


Bidwell, Sydney
Dean, Joseph (Leeds West)
Hughes, Roy (Newport)


Bishop, E. S.
Dempsey, James
Hunter, Adam


Blenkinsop, Arthur
Doig, Peter
Irvine, Rt Hon Sir A. (Edge Hill)


Boardman, H.
Dormand, J. D.
Jackson, Miss Margaret (Lincoln)


Booth, Rt Hon Albert
Douglas-Mann, Bruce
Janner, Greville


Bottomley, Rt Hon Arthur
Duffy, A. E. P.
Jenkins, Hugh (Putney)


Boyden, James (Bish Auck)
Dunnett, Jack
John, Brynmor


Bradley, Tom
Eadie, Alex
Johnson, James (Hull West)


Bray, Dr Jeremy
Edge, Geoff
Johnson, Walter (Derby S)


Brown, Hugh D. (Provan)
Edwards, Robert (Wolv SE)
Johnston, Russell (Inverness)


Buchan, Norman
English, Michael
Jones, Alec (Rhondda)


Buchanan, Richard
Evans, Fred (Caerphilly)
Jones, Barry (East Flint)


Butler, Mrs Joyce (Wood Green)
Evans, Ioan (Aberdare)
Jones, Dan (Burnley)


Callaghan, Rt Hon J. (Cardiff SE)
Ewing, Harry (Stirling)
Judd, Frank


Callaghan, Jim (Middleton &amp; P)
Faulds, Andrew
Kaufman, Gerald


Canavan, Dennis
Fitch, Alan (Wigan)
Kilroy-Silk, Robert


Cant, R. B.
Flannery, Martin
Lamborn, Harry


Carmichael, Nell
Fletcher, Ted (Darlington)
Lamond, James


Cartwright, John
Forrester, John
Lee, John


Clemitson, Ivor
Fraser, John (Lambeth, N'w'd)
Lewis, Arthur (Newham N)


Cocks, Rt Hon Michael
Freud, Clement
Lipton, Marcus


Cohen, Stanley
George, Bruce
Lomas, Kenneth


Coleman, Donald
Ginsburg, David
Loyden, Eddie


Colquhoun, Ms Maureen
Golding, John
McCartney, Hugh


Conlan, Bernard
Gould, Bryan
McElhone, Frank


Cook, Robin F. (Edin C)
Gourlay, Harry
McGuire, Michael (Ince)


Corbett, Robin
Graham, Ted
MacKenzie, Gregor


Cox, Thomas (Tooting)
Grant, John (Islington C)
Maclennan, Robert







McMillan, Tom (Glasgow C)
Rooker, J. W.
Tuck, Raphael


Madden, Max
Rose, Paul B.
Urwin, T. W.


Magee, Bryan
Ross, Stephen (Isle of Wight)
Wainwright, Edwin (Dearne V)


Mahon, Simon
Rowlands, Ted
Wainwright, Richard (Colne V)


Mallalieu, J. P. W.
Ryman, John
Walden, Brian (B'ham, L'dyw'd)


Marks, Kenneth
Sandelson, Neville
Walker, Harold (Doncaster)


Marshall, Dr Edmund (Goole)
Sedgemore, Brian
Walker, Terry (Kingswood)


Marshall, Jim (Leicester S)
Shaw, Arnold (Ilford South)
Ward, Michael


Maynard, Miss Joan
Sheldon, Robert (Ashton-u-Lyne)
Watkins, David


Mellish, Rt Hon Robert
Silkin, Rt Hon John (Deptford)
Watkinson, John


Millan, Rt Hon Bruce
Stlverman, Julius
Weetch, Ken


Miller, Dr M. S. (E Kilbride)
Skinner, Dennis
Wellbeloved, James


Morris, Charles R. (Openshaw)
Smith, John (N Lanarkshire)
White, Frank R. (Bury)


Moyle, Roland
Snape, Peter
White, James (Pollock)


Ogden, Eric
Spearing, Nigel
Whitehead, Phillip


Ovenden, John
Spriggs, Leslie
Whitlock, William


Pardoe, John
Stallard, A. W.
Williams, Alan (Swansea W)


Park, George
Stott, Roger
Williams, Alan Lee (Hornch'ch)


Parry, Robert
Strang, Gavin
Williams, Rt Hon Shirley (Hertford)


Price, C. (Lewisham W)
Strauss, Rt Hon G. R.
Williams, Sir Thomas (Warrington)


Price, William (Rugby)
Summerskill, Hon Dr Shirley
Wilson, Alexander (Hamilton)


Radice, Giles
Taylor, Mrs Ann (Bolton W)
Wise, Mrs Audrey


Rees, Rt Hon Merlyn (Leeds S)
Thomas, Dafydd (Merioneth)
Woodall, Alec


Roberts, Albert (Normanton)
Thomas, Mike (Newcastle E)
Woof, Robert


Roberts, Gwilym (Cannock)
Thomas, Ron (Bristol NW)
Young, David (Bolton E)


Robinson, Geoffrey
Thorne, Stan (Preston South)



Roderick, Caerwyn
Tinn, James
TELLERS FOR THE NOES:


Rodgers, George (Chorley)
Tomney, Frank
Mr. John Ellis and


Rodgers, Rt Hon William (Stockton)
Torney, Tom
Mr. David Stoddart

Question accordingly negatived.

7.45 p.m.

Mr. Grylls: I beg to move Amendment No. 12, in page I, line 13, at end insert—
'(2) If offering such financial assistance by means of acquisition of equity capital the Secretary of State shall not acquire more than half by nominal value, of the equity share capital of any company'.

Mr. Deputy Speaker (Mr. Oscar Murton): With this we may take the following amendments:

No. 13, in page 1, line 13, at end insert—
'(2) In section 8 of the Industry Act 1972 where financial assistance is given under this section by acquiring shares or stock in a company the Secretary of State shall dispose of the shares or stock as soon as, in his opinion, it is reasonably practicable to do so; and before making the disposal the Secretary of State shall consult the company'.

No. 14, in page 1, line 13, at end insert—
'(2) The Secretary of State shall not, after 31st December 1980 make, or undertake to make, a payment by way of financial assistance under this section, but this section shall not prevent the making of a payment in pursuance of an undertaking given within the time allowed by this section'.

No. 15, in page 1, line 13, at end insert:
'(2) In reaching any decision about providing financial assistance under subsection (1) of this section, the Secretary of State shall be guided by the following criteria—

(a) all decisions on investment in and assistance to industry, in both the public and private sectors, should have regard to the objectives of enabling British industry to compete more successfully in meeting the

requirements of home and overseas markets and of raising not merely the level of but also the return on industrial investment.
(b) profitability and return on capital should be taken as the prime test of efficient use of resources.
(c) decisions on all cases should be based on an assessment of the prospects of viability and—

(i) the assessment of viability should have particular regard to a company's past financial record, its market prospects and quality of management, its product development plans, and the willingness of non-Government bodies to put up a substantial part of the finance; and
(ii) in assessments of viability of rescue cases a period of up to three years, or longer when the Secretary of State considers that there are very exceptional circumstances, should be adopted as the timescale within which the assessment should indicate the attainment of viability'.

Mr. Grylls: I shall be short because these matters were discussed fully in Committee. I have a feeling that the House would rather like to come to a conclusion quickly.
Certain checks and safeguards were written into the 1972 Act, and we regretted that they were removed in the 1975 Act. We regretted even more that they should have been removed and the money increased in this Bill.
The Section 8 powers under the original Act were made wide and flexible. That was done on purpose. We believe that if we are to have wide and flexible powers


Parliament needs firm control over them. One of the most important powers is that of reviewing the whole procedure at the end of a specified period.
With those few words, I hope that my right hon. and hon. Friends will support these important amendments. We debated them at great length in Committee and I suggest that we do not need to go through all the arguments again on the Floor of the House. If they are not accepted by the Government, I hope that we shall win them when we vote in the Lobby.

Mr. Les Huckfield: To facilitate progress I shall be anxious to reply briefly to the hon. Member for Surrey, North-West (Mr. Grylls). As the hon. Gentleman said, most of these arguments have already been rehearsed in Committee. I am glad that he does not want to rehearse them again. I think he will recognise that he has already tried all the amendments and that they have been defeated.

Mr. Grylls: To be accurate, the votes were tied. If that were not so, they would not now be back on the Floor of the House.

Mr. Huckfield: The significant thing is that the amendments are not in the Bill as it stands. If the hon. Gentleman considers the matter, he will recognise that he is trying to restrict the Government's powers to assist industry in various ways. The amendment would prohibit the Secretary of State in certain ways from acquiring more than 50 per cent. equity capital. Another amendment would require the Secretary of State to get rid of holdings as soon as was reasonably practicable. The time limit that the hon. Gentleman seeks to put on

the assistance given to industry and the new tightened criteria have the same aim, namely, to hamstring or restrict the various ways in which my right hon. Friend is able to assist industry.

As my hon. Friend the Minister of State said on an earlier occasion, the Bill is an extension based on the Industry Act 1975, which stemmed from the Industry Act 1972. I can well understand why Conservative Members have certain queries about that legislation. As we have heard, it was prepared in a way that meant that Conservative Members and the Ministers involved were not consulted. I urge my hon. Friends to oppose the amendments.

Mr. Tom King: One of the amendments provides that the Secretary of State
shall dispose of the shares or stock as soon as … is reasonably practicable to do so".
Does the hon. Gentleman believe that there will ever be a situation in which shares that have come into public ownership should be disposed of again to the private sector? If he does not, how does he expect to have a fixed frontier between the public and private sectors?

Mr. Huckfield: The incredible thing is that the hon. Gentleman is asking for something that was not in the Industry Act 1972. Power to carry out the recycling of funds, for which he is asking, was not contained in that Act.

Mr. Tom King: It was.

Question put, That the amendment be made:—

The House divided: Ayes 181, Noes 195.

Division No. 354.]
AYES
[7.55 p.m.


Adley, Robert
Burden, F. A.
Elliott, Sir William


Arnold, Tom
Butler, Adam (Bosworlh)
Emery, Peter


Atkins, Rt Hon H. (Spelthorne)
Carlisle, Mark
Eyre, Reginald


Awdry, Daniel
Channon, Paul
Fairgrieve, Russell


Bell, Ronald
Clark, Alan (Plymouth, Sutton)
Farr, John


Bennett, Sir Frederic (Torbay)
Clarke, Kenneth (Rushcliffe)
Fell, Anthony


Bennett, Dr Reginald (Fareham)
Clegg, Walter
Fisher, Sir Nigel


Berry, Hon Anthony
Cooke, Robert (Bristol W)
Fletcher-Cooke, Charles


Biffen, John
Cope, John
Fookes, Miss Janet


Boscawen, Hon Robert
Cordle, John H.
Forman, Nigel


Bottomley, Peter
Corrle, John
Fowler, Norman (Sutton C'f'd)


Boyson, Dr Rhodes (Brent)
Costain, A. P.
Fox, Marcus


Braine, Sir Bernard
Craig, Rt Hon W. (Belfast E)
Freud, Clement


Brittan, Leon
Crowder, F. P.
Fry, Peter


Brown, Sir Edward (Bath)
Davies, Rt Hon J. (Knutstord)
Gorst, John


Bryan, Sir Paul
Dean, Paul (N Somerset)
Gow, Ian (Eastbourne)


Buchanan-Smith, Alick
Dodsworth, Geoffrey
Gower, Sir Raymond (Barry)


Buck, Antony
du Cann, Rt Hon Edward
Grant, Anthony (Harrow C)


Budgen, Nick
Dykes, Hugh
Gray, Hamish


Bulmer, Esmond
Eden, Rt Hon Sir John
Griffiths, Eldon




Grimond, Rt Hon J.
Madel, David
Roberts, Michael (Cardiff NW)


Grist, Ian
Marten, Neil
Roberta, Wyn (Conway)


Grylls, Michael
Mates, Michael
Ross, Stephen (Isle of Wight)


Hall, Sir John
Maude, Angus
Rost, Peter (SE Derbyshire)


Hall-Davis, A. G. F.
Mawby, Ray
Royle, Sir Anthony


Hamilton, Michael (Salisbury)
Maxwell-Hyslop, Robin
Sainsbury, Tim


Hampson, Dr Keith
Mayhew, Patrick
St. John-Stevas, Norman


Hannam, John
Meyer, Sir Anthony
Scott, Nicholas


Havers, Sir Michael
Mills, Peter
Shaw, Giles (Pudsey)


Hayhoe, Barney
Miscampbell, Norman
Shepherd, Colin


Heseltine, Michael
Mitchell, David (Basingstoke)
Silvester, Fred


Hicks, Robert
Moate, Roger
Sims, Roger


Holland, Philip
Molyneaux, James
Speed, Keith


Hordern, Peter
Moore, John (Croydon C)
Spence, John


Hunt, David (Wirral)
More, Jasper (Ludlow)
Sproat, Iain


Hunt, John (Bromley)
Morgan-Giles, Rear-Admiral
Stanbrook, Ivor


Hurd, Douglas
Morris, Michael (Northampton S)
Stanley, John


Hutchison, Michael Clark
Morrison, Charles (Devizes)
Steen, Anthony (Wavertree)


Irving, Charles (Cheltenham)
Morrison, Hon Peter (Chester)
Stewart, Ian (Hitchin)


James, David
Mudd, David
Stradling Thomas, J.


Jessel, Toby
Neave, Airey
Taylor, R. (Croydon NW)


Johnson Smith, G. (E Grinstead)
Nelson, Anthony
Taylor, Teddy (Cathcart)


Jones, Arthur (Daventry)
Neubert, Michael
Tebbit, Norman


Jopling, Michael
Nott, John
Temple-Morris, Peter


Kilfedder, James
Oppenheim, Mrs Sally
Thatcher, Rt Hon Margaret


Kimball, Marcus
Page, John (Harrow West)
Townsend, Cyril D.


King, Evelyn (South Dorset)
Page, Rt Hon R. Graham (Crosby)
Trotter, Neville


King, Tom (Bridgwater)
Paisley, Rev Ian
Tugendhat, Christopher


Kitson, Sir Timothy
Parkinson, Cecil
van Straubenzee, W. R.


Knight, Mrs Jill
Pattie, Geoffrey
Vaughan, Dr Gerard


Knox, David
Percival, Ian
Wakeham, John


Lamont, Norman
Powell, Rt Hon J. Enoch
Wall, Patrick


Lawrence, Ivan
Price, David (Eastleigh)
Warren, Kenneth


Lawson, Nigel
Pym, Rt Hon Francis
Weatherill, Bernard


Le Marchant, Spencer
Raison, Timothy
Wiggin, Jerry


Lester, Jim (Beeston)
Rathbone, Tim
Winterton, Nicholas


Lewis, Kenneth (Rutland)
Rees, Peter (Dover &amp; Deal)
Wood, Rt Hon Richard


Lloyd, Ian
Rees-Davies, W. R.
TELLERS FOR THE NOES:


Luce, Richard
Renton, Rt Hon Sir D. (Hunts)
Mr. W. Benyon and


McCusker, H.
Ridsdale, Julian
Mr. Carol Mather


Macfarlane, Nell
Rifkind, Malcolm



MacGregor, John
Rippon, Rt Hon Geoffrey





NOES


Abse, Leo
Cronin, John
Hooley, Frank


Allaun, Frank
Crosland, Rt Hon Anthony
Horam, John


Anderson, Donald
Crowther, Stan (Rotherham)
Huckfield, Les


Archer, Peter
Cryer, Bob
Hughes, Rt Hon C. (Anglesey)


Armstrong, Ernest
Cunningham, G. (Islington S)
Hughes, Robert (Aberdeen M)


Ashley, Jack
Davidson, Arthur
Hughes, Roy (Newport)


Ashton, Joe
Davies, Bryan (Enfield N)
Hunter, Adam


Atkins, Ronald (Preston N)
Davies, Denzil (Llanelli)
Irvine, Rt Hon Sir A. (Edge Mill)


Bagier, Gordon A. T.
Davies, Ifor (Gower)
Jackson, Miss Margaret (Lincoln)


Barnett, Guy (Greenwich)
Deakins, Eric
Janner, Greville


Bates, Alt
Dean, Joseph (Leeds West)
Jenkins, Hugh (Putney)


Bennett, Andrew (Stockport N)
Dempsey, James
John, Brynmor


Bidwell, Sydney
Doig, Peter
Johnson, James (Hull West)


Bishop, E. S.
Dormand, J. D.
Johnson, Walter (Derby S)


Blenkinsop, Arthur
Douglas-Mann, Bruce
Jones, Alec (Rhondda)


Boardman, H.
Duffy, A. E. P.
Jones, Barry (East Flint)


Bottomley, Rt Hon Arthur
Dunnett, Jack
Jones, Dan (Burnley)


Boyden, James (Bish Auck)
Eadie, Alex
Judd, Frank


Bradley, Tom
Edge, Geoff
Kaufman, Gerald


Bray, Dr Jeremy
Edwards, Robert (Wolv SE)
Kilroy-Silk, Robert


Brown, Hugh D. (Provan)
English, Michael
Lamborn, Harry


Buchan, Norman
Evans, Fred (Caerphilly)
Lamond, James


Buchanan, Richard
Evans, Ioan (Aberdare)
Lee, John


Butler, Mrs Joyce (Wood Green)
Ewing, Harry (Stirling)
Lipton, Marcus


Callaghan, Rt Hon J. (Cardiff SE)
Faulds, Andrew
Lomas, Kenneth


Callaghan, Jim (Middleton &amp; P)
Fitch, Alan (Wigan)
Loyden, Eddie


Campbell, Ian
Flannery, Martin
McCartney, Hugh


Canavan, Dennis
Fletcher, Ted (Darlington)
McElhone, Frank


Cant, R. B.
Forrester, John
McGuire, Michael (Ince)


Carmichael, Neil
Fraser, John (Lambeth, N'w'd)
MacKenzie, Gregor


Cartwright, John
George, Bruce
Maclennan, Robert


Clemitson, Ivor
Ginsburg, David
McMillan, Tom (Glasgow C)


Cocks, Rt Hon Michael
Golding, John
Madden, Max


Cohen, Stanley
Gould, Bryan
Magee, Bryan


Coleman, Donald
Gourlay, Harry
Mahon, Simon


Colquhoun, Ms Maureen
Graham, Ted
Mallalieu, J. P. W.


Conlan, Bernard
Grant, John (Islington C)
Marks, Kenneth


Cook, Robin F. (Edin C)
Hardy, Peter
Marshall, Dr Edmund (Goole)


Corbett, Robin
Harper, Joseph
Marshall, Jim (Leicester S)


Cox, Thomas (Tooting)
Harrison, Walter (Wakefield)
Maynard, Miss Joan


Craigen, J. M. (Maryhill)
Hatton, Frank
Mellish, Rt Hon Robert


Crawshaw, Richard
Heffer, Eric S.
Miller, Dr M. S. (E Kilbride)







Morris, Charles R. (Openshaw)
Stiverman, Julius
Walker, Harold (Doncaster)


Moyle, Roland
Skinner, Dennis
Walker, Terry (Kingswood)


Murray, Rt Hon Ronald King
Smith, John (N Lanarkshire)
Ward, Michael


Ogden, Eric
Snape, Peter
Watkins, David


Ovenden, John
Spearing, Nigel
Watkinson, John


Park, George
Spriggs, Leslie
Weetch, Ken


Parry, Robert
Stallard, A. W.
Wellbeloved, James


Price, C. (Lewisham W)
Stoddart, David
White, Frank R. (Bury)


Price, William (Rugby)
Stott, Roger
White, James (Pollock)


Radice, Giles
Strang, Gavin
Whilehead, Phillip


Rees, Rt Hon Merlyn (Leeds S)
Strauss, Rt Hon G. R.
Whitlock, William


Roberts, Albert (Normanton)
Summerskill, Hon Dr Shirley
Williams, Alan (Swansea W)


Robinson, Geoffrey
Taylor, Mrs Ann (Bolton W)
Williams, Alan Lee (Hornch'ch)


Roderick, Caerwyn
Thomas, Dafydd (Merioneth)
Williams, Rt Hon Shirley (Hertford)


Rodgers, George (Chorley)
Thomas, Mike (Newcastle E)
Williams, Sir Thomas (Warrington)


Rodgers, Rt Hon William (Stockton)
Thomas, Ron (Bristol NW)
Wilson, Alexander (Hamilton)


Rooker, J. W.
Thorne, Stan (Preston South)
Wise, Mrs Audrey


Rose, Paul B.
Tinn, James
Woodall, Alec


Rowlands, Ted
Tomney, Frank
Woof, Robert


Ryman, John
Torney, Tom
Young, David (Bolton E)


Sandelson, Neville
Tuck, Raphael



Sedgemore, Brian
Urwin, T. W.
TELLERS FOR THE AYES:


Shaw, Arnold (Ilford South)
Wainwright, Edwin (Dearne V)
Mr. James Hamilton and


Sheldon, Robert (Ashton-u-Lyne)
Walden, Brian (B'ham, L'dyw'd)
Mr. John Ellis


Silkin, Rt Hon John (Deptford)

Question accordingly negatived.

Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Alan Williams.]

8.2 p.m.

Mr. Tom King: It is significant that a Bill which has attracted so little interest from hon. Members on the Government side has been moved in such an abrupt way by the Minister of State. He said not a word in favour of the measure. That is entirely in keeping with the way in which the Bill was introduced by the Secretary of State on 29th April. The Secretary of State picked up a small piece of paper and described the Bill as a straightforward amendment of one subsection and one section of a previous Act. Any bystander listening might not have realised that the Government were proposing the additional expenditure of more than £1,000 million. A measure of the way in which the currency has been debased by this Government is that they regard as insignificant a sum of money of that size.
We are talking of a massive sum of money and we were right to scrutinise the spending of it. But we are not sure that it is such a massive sum as the Secretary of State thinks because of certain technical reasons which my hon. Friend the Member for Surrey, North-West (Mr. Grylls) will explain later.
There has been one common feature between today and the Second Reading debate. When the Secretary of State moved the Second Reading there was one hon. Member on the Back Benches behind him and during tonight's Report stage,

for a considerable length of time, there was only one hon. Member of the Government Back Benches. I am not sure that we welcome the presence of two other hon. Members who are now in the Chamber but who were not here earlier. Perhaps they are not aware of the significance of what is taking place tonight.
What is the reason for the total absence of hon. Members? Could it be that they have already received their instructions from Mr. Hayward and are now preparing for demonstrations against Government policy? During the entire Report stage we had only two speeches from two Government Back Benchers—the hon. Members for Luton, West (Mr. Sedgemore) and Bolsover (Mr. Skinner), two stragglers of that one-legged army.
We do not know whether it is a measure of the lack of interest or a measure of the division within the Labour Party. The moderate backlash has been advertised in this evening's papers and we have read of the Manifesto Group's counter challenge to the Tribune Group's proposal. There is certainly a lack of interest amongst so-called Government supporters. It is a contempt of Parliament when a measure to which the Secretary of State attaches importance in his opening speech cannot command the interest or even the passing attention of one Government Back Bencher for the greater part of the proceedings. We had an important debate on a series of amendments concerning possible further acquisitions and it makes a mockery of any form of debate if the Government side of the House is not even prepared to


show itself and to debate the issue openly in the Chamber. I trust that we never again see the day when hon. Members cannot be bothered to attend a debate of this importance.
I congratulate my hon. Friends the Members for Surrey, North-West and Arundel (Mr. Marshall), and other of my hon. Friends who were members of the Committee, on the sterling work which they did. I was not a member of that Committee because of another contentious measure—the Aircraft and Shipbuilding Industries Bill. I particularly congratulate them on their skill and success, not merely in probing general issues but in the excellent amendment which they succeeded in adding to the Bill and which the Government treated with such caution that they felt unable to attempt to remove it.
Throughout the proceedings on the Bill we have had no justification for the enormity of the sum of money proposed. All the evidence shows that under the 1972 Act modest expenditure has been incurred. The Government have initiated certain further schemes, a number of which we support, but even all those schemes do not begin to add up to the sums of money that are now required.
Even recognising that commitments discussed between both sides must be taken into account, there is no evidence that the Bill will be required before 1978. It is grossly irresponsible, if Parliament is to fulfil its rôle of controlling public expenditure, to allow a Bill to come forward so far ahead of the time when such sums will be needed.
The Secretary of State and the Minister of State have tried to imply that by attempting to criticise the Bill we were also criticising the 1972 Act. The 1972 Act was a modest scheme of financial assistance in areas in which such help could be justified. However, because that was a scheme that was supported—Labour Members supported it, too—that does not mean that it carries with it the obligation to support every extension of it no matter how profligate the expenditure might be. There is a limit in all things, and there must be a balance in all things.
In this situation, to be told that this is the principle and idea that we supported

and that, therefore, in some way this £1,000 million—or £2,000 million, or £5,000 million—is all right, and what a U-turn we would be committing if we even began to criticise such a measure when it was originally passed as a measure of our own creation, is a totally spurious and unjustifiable argument.

Mr. Robert Adley: My hon. Friend may recall that on the occasion of the passing of the 1972 Act, the present Secretary of State for Energy, speaking from the position in which my hon. Friend is now speaking, said that he could see ways in which that measure could be utilised to the ends of the Labour Party. I forgot his precise words. However, it will be appreciated that it would be an ideal measure and is a massive injection of public money to further Socialist aims.

Mr. King: That remark was more mischievous than true.

Mr. Adley: Not my remark.

Mr. King: Certainly not. My hon. Friend is always true and extremely unmischievous. I always regarded that remark of the present Secretary of State for Energy as more mischievous than true, because while he chose to pretend that it would be an ideal measure and eminently suitable for a Socialist Government, the first thing that he had to do on coming into office was to make massive changes and to introduce his own Industry Act, simply because he was unable to use for the purposes he wanted our 1972 Act, which contained a number of important safeguards. Those of my hon. Friends who—as I did—served on the Committee considering the 1975 Act will know that the whole reason for that measure was that the 1972 Act did not fulfil the purposes that the present Secretary of State for Energy thought were necessary. Therefore, we can kill the argument about the question of principle once and for all.
In this area there must be the right and duty to question the scale of the sums involved in such Bills. I have already said that from our evidence—unless the Minister of State has failed to inform the House about other commitments that the Government may have entered into—if the House has been properly informed about the commitments, it is impossible


to see why the Bill has been brought forward at this time. This is interesting, because with all the strange events of the past summer and this Session, the Bill has been a long time going through the House. It had its Second Reading on 29th April. It is not exactly the world's longest Bill. It has two clauses.

Mr. Adley: It is longer than it was.

Mr. King: Yes. It has been the subject of all sorts of incidents on its way. It was supposed to be considered by a Committee of the Whole House. That matter arose on a couple of occasions. That was turned down. The Government changed their minds. Eventually, very belatedly, it went to a Standing Committee.
One of the advantages of some period of time having elapsed is that it gives an interesting historical slant on the speeches made on Second Reading. I do not know whether the Minister of State has had a chance to look again at those speeches. One of the most interesting points is the number of my hon. Friends who warned the Government that if they indulged in the scale of profligate expenditure envisaged in the Bill and which had been envisaged two days earlier in a £2,000 million commitment for the further borrowing powers of British Steel, that profligate expenditure on such a scale, no matter how worthy the end, would inevitably lead to economic disaster for Britain.

Mr. Adley: So it has.

Mr. King: It is exactly as my hon. Friend says. We now find ourselves at the end of October and we can see just how sadly prophetic those words were. It is a fairly humiliating thought that the money the Government are now proposing in the Bill is not actually in their possession. I suppose that the ability to implement the Bill is now dependent on, possibly, Chancellor Schmidt or the International Monetary Fund. That shows the Government's lack of wisdom and foresight in bringing forward Bills involving this scale of expenditure when they simply have not got the money.
This is intended as a measure to help to regenerate British industry. That claim has not been made in exactly those words, but I think that the Minister of State would agree that that is part of the

strategy he would claim that his Government are following. What we said at the time, which is supremely true now, is that there is simply no way in which the Government can, by this public money, bring about the regeneration of British industry. That will not come from measures of this kind. It will not come from the expenditure of public money in all sorts of areas identified by the Government, by civil servants or by particular pressing, urgent needs in different parts of industry.
The only way in which the regeneration of British industry can be achieved is by the successful operation of the vast multiplicity of industry, both large and small. I am delighted to see in the Chamber my hon. Friend the Member for Basingstoke (Mr. Mitchell), because it is throughout the whole range of British industry that we must achieve the scale of activity that we need. With investment in British industry running at about £3,000 million a year, the contribution that will come from the National Enterprise Board in financial terms is just a speck on the ocean, as is the contribution that will come under the Bill. This is simply no substitute for the ability of companies to generate their own funds from profitable operations and the success of those companies in having the funds to be able to invest in the future.
The danger in the Bill is that even with moneys on this scale—I have referred to it as profligate expenditure—it provides a smoke screen. There may even be some Ministers who still honestly think that they can make a real impact on British industry by a measure of this kind. I leave aside entirely the question whether the money will be well spent or spent on viable projects. It is only a small part of what is needed and it is simply no substitute for the generality of successful British industry.
Instead of bringing forward endless additional temporary measures of various kinds, whether in employment subsidies—which are clearly being grossly abused at present—or pouring more and more funds into support schemes of various kinds, what I should like to see the Government doing is addressing themselves to the real problems. On Second Reading I dealt with some of the problems of price control. That again involves no change of principle on my part, or on


the Opposition's part. We introduced a system of price controls at a time of acute difficulty. However, the analogy that I have used previously is still perfectly apt. I regarded that as a tourniquet applied in a crisis situation in which certain measures had to be taken. The analogy of a tourniquet is that it is necessary in an emergency to stop the bleeding; but leave it on too long and one gets gangrene. British industry is in a similar position today.
Although there have been modifications to the Price Code, it is still far too complicated. Now, we have a bright new Secretary of State for Prices and Consumer Protection, whose first pronouncement was that the Price Code was too complicated. He said that it would have to be changed and that something might be done about it by next July. How pathetic, when a change in the Price Code is probably the most immediate way to regenerate profits within one sphere of British industry!
Something will also have to be done to regenerate and remotivate people in British industry. I went to a factory in the Under-Secretary of State's constituency and asked what was the problem. I was told that it was the shortage of skilled men. That company had a successful export record. Even with the unemployment level in Keighley, there is a shortage of skilled men in that factory. I was told that 10 skilled men had been lost in the past six months. Three had emigrated to South Africa because they saw no future and no opportunity in this country. Others had gone to work with public sector bodies, two as wardens of local amenity centres, at much higher salaries.
We must ensure, first, that public authorities paying high salaries do not siphon off skilled people who are vital to British industry and, secondly, that people still feel that there is real opportunity and motivation for their effort.
Reference has been made to pop stars, film stars and others who leave the country. What worries me much more is the haemorrhage of skilled talent—the chemists, engineers, technicians, dentists, doctors, architects and all the skilled professional and able people who have had the finest training in the world in this

country who are no longer available to us. If the Government think that they can paper over this crisis and conquer those handicaps by bringing forward a Bill which empowers the payment of £1,600 million of someone else's money, we are really in trouble.

Mr. Cryer: Is the hon. Gentleman arguing that engineers should have higher wages, or does he accept that the trade union movement as a contribution towards the recovery of British industry has made significant sacrifices, first in accepting the £6 wage limit and currently in accepting the 4½ per cent. limit? If he accepts that, does he not think that British industry should also make an effort by increasing the level of their investment?

Mr. King: If the Under-Secretary of State misunderstands the problem to the extent indicated by that intervention, we have real problems. It is a matter not just of wages but of the tax structure and tax levels. The greatest sacrifices that have been made in the last two or three years have been made by the people who are moving up into the skilled areas. That is shown by the figures. Although there are many who for various reasons have no alternative but to take it on the chin for family and personal reasons, those who have more ambition and drive are determined to do the best they can for themselves and their families. We are losing the people whose skills are in international demand, and they are the people we can least afford to lose.

8.26 p.m.

Mr. Eddie Loyden: I shall not follow closely the arguments advanced by the hon. Member for Bridgwater (Mr. King). Anyone listening to his arguments might think that unemployment and the low level of investment in industry were phenomena of the 1970s which had come about in the past five years or so. He said that the Government's policies were responsible for high unemployment levels and that their policy in pursuit of the revival of industry by greater investment was inadequate.
In the 1920s and 1930s British capitalism was not faced with the problem of low profitability. Why then was there mass unemployment and a low investment level? Again, in the 1960s, why


was there a low level of investment? The hon. Gentleman suggested that if British industry had the opportunity to be profitable it would carry out its responsibilities and secure its recovery. If that is so, why has not British industry done that in the past?
The over-simplified way in which the Opposition approach the problem is astounding. Production is no longer a problem. New techniques and technology have changed the nature of British industry which, from being labour-intensive, is moving towards being capital-intensive. The system has advanced to such an extent that production is no longer dependent upon an industry being labour-intensive. The problem we face is not that of production but of distribution.
I turn now to what may be considered a parochial problem. In my area unemployment is running at 11·5 per cent. Private enterprise has shown no willingness to come into areas where new industries are needed. In areas where old industries such as docks, warehousing and distribution are declining, there is no evidence that those who reaped profits during the last century in Lancashire are prepared to invest cash in the new industry that is needed in that area. The Government must be more positive in intervening to secure the introduction of industry where it is most needed.
Some of my Labour colleagues and I believe that the Government do not go far enough in that direction. We believe that the only way forward, as was made clear in our manifesto and in the policies on which we fought the General Election, is to bring about a radical change in the power structure of our society for the benefit of those who produce our wealth rather than those who own and control it. As the beginning of that process, we look to the setting up of the NEB which we hope will reinvigorate areas of decline, such as Merseyside. Such areas face both industrial and population decline and they also suffer many social problems. Liverpool, London, and all major conurbations are suffering from a population decline. We hope that finance is made available from central Government to further social policies in those localities. Although at this stage the Government are thinking about cuts in public expenditure, we know that there is

a growing need to make available more public expenditure in those localities.
I am sure that many Opposition Members are not aware of the crisis in industrial conurbations. Although we believe that this Bill does not go far enough, it will at least go some way towards arresting that decline. Therefore, it is important that there should be no further handouts of central Government finance to private enterprise because that money is only moved from place to place, as is happening in the Courtaulds company. In the Courtaulds situation, a new factory is being built to the detriment of other factories in the North-West and in other areas—and that is all being done with the aid of Government money.
We hear much criticism from the Conservative Benches about the activities of the public sector, but they should turn their minds to the amount of money that is being made available by the Government for private enterprise activity. What happens once those private enterprise concerns receive the handouts is that they then move to other more attractive areas. That has happened on many occasions in areas in the North-East and North-West. I hope that the Minister will set his mind against the giving of handouts to private enterprise and will provide a firm base at the centre—namely, within the NEB—so that that money can be used to establish industries under principles decided by the NEB.
I repeat that the Bill does not go far enough, but we welcome its provisions as a means of achieving the aims of the NEB so that industry is brought into the areas where needed. Because private enterprise has failed to take on that job, the Government have a right to intervene on behalf of the people in those areas.

8.32 p.m.

Mr. David Mitchell: Tonight the House is being asked to approve a Bill to spend up to £1,000 million of taxpayers' money which the Government have not got. Throughout the week many hon. Members on both sides of the House have been oppressed by a feeling of unreality. One sees on the tapes and in newspaper headlines how our sterling is under pressure and realises the appalling consequences for our people, be they workers by brawn or brain, skilled or unskilled, or management. If the falling


away in the value of our currency is not checked, there will be the most appalling outlook for our nation.
Against this background we are now being asked to spend up to £1,000 million which, I repeat, the Government have not got. Do they not know the effect on sterling of spending money which they do not possess? We had no assurances throughout the long Committee stage that the money will be spent only on viable projects. The money will be raised partly in taxation—even by taxing people who now live below supplementary benefit level. That money is to be spent on a "rake's progress" by the Government.
We shall vote tonight in the knowledge that following previous legislation the Government have spent money against the advice of their own ministerial advisers and planners. Therefore, we must ask ourselves three questions—and we should consider the answers carefully before deciding how to vote. First, will this lucky dip into the fairy gold succeed in spotting the winners? Secondly, how are genuine jobs to be created? The hon. Member for Liverpool, Garston (Mr. Loyden) mentioned the decline of industry in certain areas—and one can only wonder how new industry can be made to take the place of the old industries. Thirdly, where will the money come from that the Government are proposing to spend?
We all recognise—at least, on the Conservative side—that business is something alive, not something static, with a lot of small firms at the bottom, middle-sized firms in the middle, and a few very large ones at the top. That is not the picture. It is the picture that perhaps is seen by people in the Civil Service, but the reality is that business is a living community, in which old firms and their products and ideas get older and become ossified in the way that people do—if they are not propped up in a bureaucrat's nest for "lame ducks"—and their place is taken by vigorous, thrusting young firms with new ideas. But these vigorous new firms can get the resources to do this only if the old firms are not taking the resources away from them. In other words, it is an area in which there has to be constant change.
The Bill picks out certain firms and gives them Government money. It does not give money to the generality. The question is how the Government can spot the winners. Would any board of civil servants, faced 20 years ago, with a project to make life easier for housewives having to mix puddings, ever have succeeded in getting public money for it? Of course, they would not. But that, indeed, was the concept in the mind of one small business man, leading to the great Kenwood Mixer firm, with all the jobs and wealth it has created, as well as the benefits for a multitude of housewives.
It is not possible for the Government to spot the winners. The reality is that out of a massive number of small firms, only a small number will grow through to be the giants of industry in 10, 15 or 20 years' time—and they will do that by ploughing back their profits into their own business. The Bill will tax all firms in order to give to a few, and the few to which it will give will not be the winners. The winners will have been taxed out of their ability to win, and all of industry and all of us will be the loser for it.
The crucial question is how to create new jobs. Jobs are created by the bringing together of four things—skilled manpower, motivated management, capital, and a market—plus the certainty that that situation will continue without the threat of nationalisation hanging over successful firms.
The Under-Secretary of State for Industry, now responsible for small businesses, may laugh, but his record of advocating nationalisation and threatening the life of small businesses makes his appointment one of the most interesting since the Emperor Caligula made his horse a consul.

Mr. Cryer: I wish the lion. Member for Basingstoke (Mr. Mitchell) would keep his eye on the purpose of the Bill. The Bill is not about nationalisation. I know that the Tories are having a little game tonight, but will the hon. Member concentrate his mind on the fact that the Bill is about assistance to industry which the Government are trying to provide? Let us not have any red herrings of the sort that the hon. Member has been putting forward.

Mr. Mitchell: If the hon. Gentleman does not think that confidence is a key factor in providing employment in this country and creating successful industry, he knows even less than I assumed he knew about it. He must be aware that the sort of comment he has made on so many occasions in the past has posed a substantial threat to that confidence.
I ask the House to consider for a moment the factors that I mentioned, the first of which was skilled men. On Merseyside there are plenty of skilled men. The trouble is that they, are unemployed. I praise the Government for the work they have done—building on what we did before, but I make no party point—in re-training people, because it is not only manpower that we need. We need skilled manpower. The more we can do to re-train people and give them the skills which industry will need when trade picks up, the better.
All praise to those hon. Members on both sides of the House who have done that kind of work. But it is not sufficient just to have labour. Look at China, Jamaica, and a hundred other poorer countries in the world. They have labour, but not the standard of living that we hope to have in this country.
We need motivated management. What is happening to management? Time and time again, we find skilled people going abroad. The number of skilled managers in this country going to Germany and France to take up executive posts because of the level of taxation in this country means that it is not worth their while to stay. I deplore that. I wish that people would stay. But, unless they can see the opportunity of building up savings for themselves and for having something to show for what they have done, they will not stay.
Thirdly, we need capital. Investment is essential. It is because we have not got investment that we have not what we need on Merseyside and in other parts of the country. But how can we expect anyone to borrow money at 18 per cent.—the level to which this Government have driven interest rates—and make a profit? What is more, "profit" is still a dirty word to Government supporters below the Gangway, and, if anyone gets anywhere near that sort of return, he is in trouble on a multitude of fronts.

Mr. Ron Thomas: Perhaps the hon. Member for Basingstoke (Mr. Mitchell) will be kind enough to explain why these innovating entrepreneurs failed to invest between 1970 and 1974 when the Conservative Government gave them everything that they asked for.

Mr. Mitchell: It is nice to see the hon. Member for Bristol, North-West (Mr Thomas) joining our debates. However, since my hon. Friend the Member for Bridgwater (Mr. King) dealt with that point at some length, perhaps the hon. Gentleman will read Hansard tomorrow.
The position is that no one can borrow at 18 per cent. and make a profit. Therefore, the crucial question which this House must ask itself is why interest rates are so high and how we are to get them down.
Money is a market, just like every other commodity. In that market, it is supply and demand which determines the price. When the Government are borrowing £12,000 million, they are sending the borrowing rate soaring up. If the Government did not overspend—they are spending £5 for every £4 that they have in income—we should not have the interest rates that we have today and, if we did not have those interest rates, it would be worth while for people in Merseyside, Basingstoke and elsewhere in the country to borrow money and start an enterprise by bringing together the available manpower, the motivated management which taxation is destroying, and the investment which we are so determined to oppose that we clobber people who are willing to invest with taxation.
I know a man who has invented a remarkable device to assist the motorist. He would have been able to put up about £10,000, mortgaging his house to find it. He already has a skilled job in industry, so it would be an investment. If he were lucky he would get a return of £1,000 a year in interest. The Chancellor of the Exchequer would leave him with about £20—just about enough to take his wife out for a good dinner in the West End provided that they did not have champagne. Who will risk the value of his house for that sort of return? That is what causes the problems of Merseyside and other places where areas of deprivation are developed because it is not worth while to invest. This Government want


employment but not employers, and investment but not investors.
I ask from where this £1,000 million is to come. Where, indeed, my hon. Friends may ask. Government supporters may also ask, where, indeed. We have the sorry sight of the Chancellor of the Exchequer polishing up his begging bowl as he goes from one place to another. A great nation has the bailiffs arriving in a few weeks. Will Government supporters have the courage to abstain and allow the curtain to fall on this sorry farce of a Government? I doubt it. Will they accept, then, that so long as this Government stay in office with their present policies, so long as they overspend, so long will they overborrow, and interest rates will be too high? So long as they overspend, they will overtax.
The greatest potential for the recovery of this country's industry lies in the small business, and it is from that area that most of this money will come. Over £200 million will be taken from the small business sector alone by the 2 per cent. extra that the Chancellor will get by the employment tax which he proposes to introduce on national insurance. That is money which should have been left in the small business sector. Left there, it would do much more to create jobs and production. Taken from that sector, transferred to the Government and spent, it will add to the arid wastes of Merseyside and other places where we cannot get people to invest.
A large proportion of that money will come from those who are overtaxed already, unable to expand and without the incentive to do so. The time has come for the House to reject this sort of Bill and to look to restoring incentives to industry.

8.46 p.m.

Mr. Richard Wainwright: On a topic which, by common consent, is as intractable as it is urgent, the House seems to have been largely denied a really penetrating and probing debate, mainly because both Front Benches, each for their different but not meritorious reasons, have had too much to gloss over. Because of the Government's delicate position at the moment, both at home and abroad, we have not heard from them tonight the real purposes of the Bill or the

detailed use they intend to make of this vast increase which they are piling on to the 1972 Act, as amended by the 1975 Act.
It was particularly disappointing, certainly to a fellow Yorkshire Member, that from the newly-arrived junior Minister we did not have that joyful exultation in the prospects for using the Bill to which some of us had been looking forward. I mean nothing offensive when I say that the Under-Secretary of State—the hon. Member for Keighley (Mr. Cryer)—in dealing with the amendments today, seemed to be back in the days when he was unveiling new fire engines for the borough of Keighley, saying that a magnificent engine was now on the scene but that he hoped that the occasions for using it would be very sparing. That is not what we hoped for from this side of the House.
The shyness of the Conservative Front Bench has been manifested throughout the proceedings on the Bill, from Second Reading onwards. The Bill has parents, of course. One of the oldest jests in history is the silly excuse for the unwanted child. "It is only a very small one." But this is the first time that I have heard the excuse that the parents were very small. Conservative Front Bench speakers tonight have repeated that although they had to admit that they provided the model for the Bill their model was a very tiny one. The apparent offence of the present Government is that they have blown up the Tory model to an exaggerated size.
That, of course, is to miss the main point of the argument. I must exempt from this bit of criticism the spendidly clear and logical contributions that we have had throughout and with which we were especially regaled in Committee from the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). His position at least has been crystal clear on this matter ever since he was so shamefully treated by having the provisions of the 1972 Bill hidden from him when he was a Minister in a Conservative Government.
I am sure that the whole House knows the story now. The hon. Member revealed it to us in Committee on 20th July. He said that he was not in any sense consulted on or made part of the


preparation of that Bill in 1972. If only the two Front Benches had exposed their philosophy of State intervention with the same frankness and intellectual rigour as the hon. Member for Cirencester and Tewkesbury, we should have had a great deal more illumination from the debate.
In considering British industry, we are dealing with a patient which has been afflicted grievously for many years under many different Governments. When one says that private enterprise is unfortunately not in a state to shoulder all the burdens which it might wish to shoulder, one is not necessarily criticising those in charge of the private sector. What we are saying is that they have been so maltreated over the years that many of them are in a debilitated condition, very often through no fault of their own.
I must protest about the facile assumption of some Opposition Members that by a series of changes in our tax system and our law of competition private enterprise, which has been so ill-treated in the past, can suddenly be made to flourish like the green bay tree with the advent of a new Government, and therefore will not need the financial assistance which it has previously sought from the Government. The idea that the situation will be transformed by a change of Government has surely been shown by the history of zig-zag government since the war to be a complete myth. At long last the electorate is beginning to realise that simply to put Box instead of Cox will not regenerate British industry.
We must admit that there has to be a great deal of assistance and that much of it has to be long lasting, if not permanent. I wish that the Bill were in such a form that I could recommend my right hon. and hon. Friends to vote for it. I hoped when we opposed it reluctantly on Second Reading that the Government would have further thoughts, not necessarily accepting amendments from this side but introducing some financial discipline and a real measure of parliamentary control. I hoped, too, that they would indicate from the highest quarter that they were prepared to look at some of the other economic institutions of government to see whether they could adapt them to the tremendously increased rôle which Government finance is to play if the Bill is passed.
We had hoped for many months that there might be an announcement that the NEDC was to be extended to include representatives of the Opposition parties, so that there could be a wider involvement in discussions about Government intervention in industry. But nothing has been forthcoming. Instead, for strange tactical reasons, the Government have accepted one amendment which was passed in Standing Committee. That is not enough.
The Bill provides for no budget to be presented to the House of the sums involved. There is no proper provision for accountability. There is no alteration of the procedures of the House to control the fantastic sum of £1,600 million. For those reasons, and because the whole thing lies open to be used as a great engine for vote-catching by whichever major party happens temporarily to be in power, we shall reluctantly have to oppose the Bill.

Mr. Eric S. Heffer: I want to take up a point raised by the hon. Member for Basingstoke (Mr. Mitchell) who said that Ministers did not always take the advice of IDAB. This was something which was raised recently in the Public Accounts Committee Report and we have heard it quite often from both the Front Benches and the Back Benches on the other side. It is important once again to clarify this point. The IDAB was appointed under the 1972 Act, and we are discussing the amendment of that Conservative Act this evening. The Board was appointed by a Conservative Government which was heavily biassed in the direction of people from the City, and, as a result, only one, or perhaps two, trade unionists served on it. In my opinion it was not a balanced view which came on occasions from IDAB. It was a view based on the philosophy that money should be given only to companies if the criterion of of viability was accepted totally.
The criterion of viability is all right in most circumstances, but not in all. In areas of very high unemployment, such as Merseyside—and my hon. Friend the Member for Liverpool, Garston (Mr. Loydon) made a very good case for my area this evening—one cannot just look at the question of viability. Social consequences of the closure of companies


adding to the already high level of unemployment, must be considered. We have about 86,000 unemployed people in Merseyside and any company that closes obviously adds to that problem. When we talk in terms of viability, we must also consider the social consequences of closure.
Take, for example, the closure of the Courtaulds factory at Skelmersdale in the Merseyside area, which means that another 1,500 workers will be thrown out of jobs. The level of unemployment in that small town will be 25 per cent. of all workers—that is, one in four. Just imagine the effect this has on their families. If another part of Courtaulds, the Furzebrook Knitting Company, is to close down, that, too, will add to the very high level of unemployment in the Merseyside area, which is already suffering terrible problems.
If Conservatives are honest, instead of just making propaganda speeches, they will admit that their 1972 Act was brought in because they knew that they had to deal with the consequences of closures taking place at that time and the need for investment in industry.
Upper Clyde Shipbuilders was saved by a Conservative Government. Rolls-Royce was saved by a Conservative Government. They had to look at the social consequences in precisely the same way as this Government had to look at the social consequences of British Leyland collapsing.

Mr. Grylls: It is true that the Industry Act is designed to help regional policy where high unemployment is a worrying problem—but not the part with which we are now dealing. We are dealing here with Section 8, which has nothing to do with regional policy. The hon. Gentleman is making a good case for regional policy. That comes under Section 7, not Section 8.

Mr. Heffer: The hon. Gentleman must listen carefully to what I am saying. British Leyland was covered by Section 8 and it had nothing to do with regional policy. Rolls-Royce was Section 8. That was not regional policy. UCS could be concerned purely with regional policy. I am talking about the rescue of companies under Section 8. I am not talking about

Section 7. Of course Section 7 deals with regional policy, and incidentally is allied to Section 8. There is no point in saying that it is not.
I understand the hon. Gentleman's argument. I did have somthing to do with administering this measure for a period and in helping to change it—in my opinion in a better way although it is still not good enough. I do have some knowledge of the issues involved. Even in the context of viability, we have to look at the social consequences. The rescue of Rolls-Royce and British Leyland was important for the social welfare of our people. It was necessary to rescue those companies irrespective of whether they were in assisted or non-assisted areas.
I am sorry that the hon. Member for Basingstoke (Mr. Mitchell) has left the Chamber because I wanted to take up his point about small businesses. Believe it or not, I am a believer in small businesses and in assisting them. I always have been. Small businesses have a rôle to play in this country. I hope that the Department of Industry will pay more attention to what happens in the major conurbations when new roads are pushed through a city and all the small businesses are cleared out. There are then no premises which can be rented at a reasonable rent by the small businesses. In that way we lose a tremendous amount of employment.
We must step up our encouragement for the type of factory known as the "nursery unit". That should be developed on a much greater scale so that we may attract back to the city centre areas all those small businesses which have left and which provide employment for hundreds of workers. This can help to create employment and make a positive contribution towards the development of urban life. I want assistance for small businesses. I am not saying anything new. I have argued this strongly in the House before.

Mr. Cryer: May I assure my hon. Friend that the problem of small businesses is very much in the mind of the Department. Early next month I shall be inaugurating a pilot counselling service in the South-West which is designed to help small businesses. If it is a success it will be extended to other


areas. The sort of problems my hon. Friend has raised will be directly transmitted to the Department.

Mr. Heffer: I am delighted with that statement. I am delighted that we have a Minister with responsibility in the Department for pushing this matter ahead. I look forward with great interest to the statement that will be made and to see how the policy works out in practice. I do not want to be too sceptical, but I have heard many other Ministers from Governments of both parties promising to help small businesses, but their intentions never seem to bear fruit.
I wish now to deal with the rôle of the National Enterprise Board, which was referred to by my hon. Friend the Member for Liverpool, Garston. I wonder whether part of this money will go to the NEB. I think that the Board needs its own capital, without having to go through the Section 8 procedure to get it. Without its own capital the NEB could be greatly restricted.
One of the main rôles of the Board should be to assist in the development areas. Areas with a high concentration of unemployment should benefit from the NEB coming in and developing new companies and new factories. The Board should have the task of creating positive and meaningful work. It could, for example, examine how best to help in getting commodities or machinery to the development areas. The NEB would create publicly-owned companies which would produce goods which are badly needed in the underdeveloped countries. This would be much greater help to the underdeveloped countries than merely giving them grants and loans when they need goods, sometimes capital goods, which could be made in our development areas.
I am sure that the Bill will make some contribution to bringing down the level of unemployment, although in some respects it does not go far enough. If it helps to reduce the numbers who are out of work it should command the support of every hon. Member. I make an appeal particularly to the Conservatives. The original Act was their Act, and it is their policy. We are only bringing it slightly up to date.

9.8 p.m.

Mr. David Price: I wish to correct the hon. Member for Liverpool, Walton (Mr. Heffer) on one point. He said that Rolls-Royce was saved under Section 8. It was not; it was saved under separate legislation, and I was one of the Ministers who steered that legislation through the House. It is important to explain that, because it will show hon. Members that I believe in a mixed economy and that I am prepared to see legislation used to save an industry in difficulty.
As a Minister I refused IDCs in the South and the Midlands in order to try to persuade industry to go to unemployment areas, particularly to Merseyside. I shall not go through a general account of the firms with which I was successful, or of those with which I was unsuccessful. I agree entirely with the social objectives of hon. Members. We have come down, however, to discussing the means by which those objectives are achieved.
The hon. Member for Liverpool, Garston (Mr. Loyden) ignored one major point. Capital does not just exist in a vaccum. It has to be created. Capital, whether from the public or private sector, whether produced voluntarily or enforced through taxation, comes from a forbearance to spend in the current year in favour of ploughing back in future years. There is no trick of government by which one can cheat that simple arithmetic.
Hon. Members opposite must address themselves to the fact that the public sector, which represents about 60 per cent. of the total economy, is borrowing £12,000 million this year. That money must come either from the 40 per cent. of the economy in the private sector or from abroad. In fact, it comes from a combination of both those sources.
The degree to which it can attract funds at home is affected by our ridiculously high interest rates in terms of industrial investment needs. I think that I would carry Government supporters below the Gangway with me on that point. This Government borrowing therefore involves a high level of foreign borrowing, which hon. Members below the Gangway probably dislike as much as I do.
The Minister of State said on Second Reading that the Bill was:
a proper job-creating and investment-inducing measure."—[Official Report, 29th April 1976; Vol. 910, c. 648.]
I am sure he continues to carry the whole House in his desire for job creation and methods of encouraging industrial investment, but investment comes only from savings.
At the end of July or the beginning of August the Treasury produced papers for the NEDC called Scenario I and Scenario II. The latter was adopted. I suggest that it is putting hope before experience. It expects the value of exported goods—at 1970 prices—to increase next year by 14¼ per cent., in 1978 by 13¼ per cent., and in 1979 by 10 per cent. Manufacturing investment, on which this all depends, is expected to increase by 21¼ per cent. next year, by 27½ per cent. in 1978, and by 11½ per cent. in 1979, with the result that industrial output will increase by 11 per cent. next year, 10½ per cent, in 1978, and 6 per cent. in 1979.
For the reasons I have already indicated, there is not a cat in hell's chance of getting that level of investment. I am sorry that the hon. Member for Colne Valley (Mr. Wainwright) has left the Chamber. He said that he would like to see Members of the Opposition on the NEDC. I should like to see a closer link between the little Neddys in various industrial sectors and the Council. It would not then have produced Scenario II.
The little Neddy in the chemical industry has a better track record of forecasting trends accurately than has any other sector of British industry, and there are extremely good working arrangements between representatives of the management and trade unions. They could have told the Government and the Council that Scenario II was not on.
Over the next four years, Scenario II involves an average growth rate in chemicals of 10·8 per cent., in ferrous metals of 12·3 per cent., in instrument engineering of 11·3 per cent., in electrical engineering of 10·7 per cent., and in motor vehicles of 11·1 per cent. These rates of growth have never been achieved. I should love them to be achieved, but that is a hope well beyond experience.
We are talking about a growth in chemical exports of 20 per cent. a year for each of the four years covered by Scenario II. That means in real terms a doubling of exports in four years. It Is not as if the industry does not have a good track record in exports. In fact, its record is acknowledged by one and all. To fulfil the Scenario II targets for the chemical industry would involve twice the increase in world trade that is foreseen either by the OECD forecast or by the assumptions of Scenario II looked at in macro and not in micro. We must also bear in mind that the chemical industry is one of the key industrial sectors.
It is fairly clear that the Government's industrial strategy was based on mythological grounds or, to say the least, on hope. Since then we have had the minimum lending rate increased to 15 per cent. and another increase in inflation. We are talking about a rate of inflation of 14 per cent. a year. We have had a continued fall in the value of the pound, which, if nothing else, has a bearing on the price that industry has to pay for raw materials and semi-finished products, and in some cases for equipping itself with machine tools and the like.
I do not suppose that I shall carry either Front Bench with me when I say that I am critical of continuing the detailed pay control. I see the situation in micro terms and not in macro. I have knowledge of individual companies in individual industries, where the lack of the ability to negotiate a proper productivity arrangement between management and trade unions is, in my judgment, a considerable obstacle to reducing manning and increasing productivity.
As the House knows, I have some credentials in this area. I worked for many years as an industrial engineer. Perhaps I shall carry one or two Labour Members with me when I say that any rigid and detailed application of a pay policy for any length of time has the effect that I have described. If the Government feel that overall the advantages of a detailed pay policy have precedence over the factors to which I am referring, they must acknowledge it and accept the consequences. They must not preach higher productivity to managers who know how to get it, but who are not able to share that productivity with their


work force and with those with whom they co-operate and work on the shop floor. That is industrial participation on the shop floor, and managements are not able to enter into proper productivity agreements because of the detailed pay control imposed from the centre.
I believe that these obstacles—they are very real—have become worse since Second Reading. I think that the Minister owes it to both sides of the House, to managers, trade unionists, work people and the sources of capital to restate the Government's industrial strategy.
The Government's industrial strategy reminds me of a scene in J. M. Barrie's "Peter Pan" when the audience is asked to continue to believe in the existence of Tinker Bell. The audience is asked
Do you believe in fairies?
They all shout "Yes" and they are told that Tinker Bell will continue to live. The Government's industrial strategy is a Tinker Bell situation. It will continue to exist in the Government's minds and in the public's minds as long as the TUC and the CBI get together in Neddy and say "Yes, we still believe in the Government's industrial strategy" when asked. However, when we get out of the theatre we know that Tinker Bell does not exist. When we get to the shop floor we know that the Government's industrial strategy, like Tinker Bell, does not exist.

9.20 p.m.

Mr. Martin Flannery: I was intrigued by the almost lyrical conclusion of the hon. Member for Eastleigh (Mr. Price). I assure him that the Labour Party does not believe in Tinker Bell.
I was also intrigued when the hon. Member for Bridgwater (Mr. King) referred to how few Labour Members there were on these Benches. The hon. Gentleman has a point. But there seems to be some illusion. The serried, seething ranks of Opposition Members behind the hon. Gentleman passionately waiting to speak are a figment of his imagination. I suggest that he should be a little fairer in his assessment.
Throughout the debate there has been a fundamental difference between the two sides. It is always the same fundamental difference. The lust for profits dominates almost all the speeches by Opposition Members, whereas we really

believe in the Labour Party's manifesto intention of giving to those in need by taking away from those who have too much, as instanced in the sale of certain houses recently.
The Opposition want public funds to bolster up a faltering economy to put profits into their pockets. They never hesitate to come with the begging bowl. In Sheffield there is a private firm in desperate need of public cash. The Labour Government will no doubt see to it that that faltering firm gets public cash through the very Bill that the Opposition are opposing. If they succeed in their opposition, they will prevent money going to their own supporters in many cases. That is an intriguing thought. Private possession and public squalor have always followed the Conservative Party. Indeed, that is going on now.
We are deeply worried that the £1,000 million relaxation in the Price Code will not be invested in the way intended by us. We all know that the legislation that we are putting through is to try to rectify the damage done to the economy by lack of investment year after year. There is not the slightest evidence that moneys going from this Government to private enterprise will be used to produce the Goods that we need to stabilise our faltering economy.
There has been a lack of investment for many years, despite the fact that the money has been available. Indeed, the banks are bursting with money now, and the Opposition know that. No talk can conceal that fact. A year ago we heard from the then Secretary of State for Industry something that many of us did not appreciate—that no less than £3 million a day of public money was going to aid faltering private enterprise. We wondered exactly where that vast amount of money was going.

Mr. Ian Lloyd: Will the hon. Gentleman give way?

Mr. Flannery: There is not time. I want to make this point in view of what has been happening. That money, somehow or other, did not find its way into the economy. Workers throughout the country who need this money urgently are being laid off because their firms in private enterprise, as well as in the public


sector, cannot compete in world markets due, to the failure to invest in our economy.
The Opposition talk about patriotism. Yet they invest money abroad where they can get the maximum profit. That is the reality of what has been happening. [Interruption.] Hon. Gentlemen may shout at me from their serried ranks as much as they wish, but that is the reality.
I take it for granted that the Opposition want to reduce unemployment just as we do and want the money going from public funds to help the faltering private sector to be used to achieve a reduction in the numbers of unemployed. If so, hon. Gentlemen opposite should vote for, not against, the Bill, because that money is destined to go to their private factories in an attempt to reduce the level of unemployment. Are the Opposition for more or for less unemployment? The Labour Party is for less unemployment. The Opposition should support the Bill if they want to reduce the level of unemployment.

9.25 p.m.

Mr. Grylls: The debate has been unusual, because the Minister did not make a speech to introduce the Third Reading. That could be said to be a debasement of parliamentary currency or, to put it less strongly, somewhat arrogant.
The hon. Member for Sheffield, Hillsborough (Mr. Flannery) is a teacher and I hope that he teaches the facts of industrial life more accurately than he did tonight. He lives in cloud-cuckoo-land if he believes that industry is really like that.
During Committee there were no speeches from the Government Back Benches. The Bill contains only one clause but there were seven sittings of the Committee—six before the Summer Recess and one afterwards. I thought that Government Members would come back bouncing after the recess to support the Bill, but not one speech was made by them. We can only assume that they have nothing good to say about the Bill.
The hon. Member for Liverpool, Walton (Mr. Heifer) was a Minister and operated the Industry Act. He knows a good deal about it and he was Minister in the Department when the 1975 Act was

going through the House. I am delighted that my hon. Friend the Member for Basingstoke (Mr. Mitchell) has converted the hon. Gentleman to a belief in small business. That was a stroke of genius which I never believed even my hon. Friend could achieve. It is an important step forward which I welcome. The only question mark which hangs over the issue is, why should it be respectable to be a small business but be threatened with nationalisation if it becomes bigger? It is hard to understand the logic of that.

Mr. Heffer: I must put the record absolutely straight. If the hon. Gentleman attended the House at Question Time he would know that I have been on about small businesses from the day I left the Government. In fact—and I do not think this is giving away any State secrets—I was on about small businesses all the time that I was in Government. The hon. Member for Basingstoke (Mr. Mitchell) can hardly claim to have converted me to a particular viewpoint tonight. He has never converted me to anything.

Mr. Grylls: It is ironic that in this week, when the economy is almost in total collapse, Parliament should be considering the Third Reading of such a Bill. Under the Bill the Government may spend two and a half times the total that it could spend before. The need to cut public expenditure is clearly understood. About 76 per cent. of people in a recent poll said that they were in favour of cutting public expenditure. It is odd that the Government should make cuts in social services and so on but never think of cutting the public money that they are throwing around in other directions. Today the Minister is pressing the button of further public expenditure. This is the gambler's last throw because the Government's industrial policy, however worthy originally, is today in tatters. Perhaps that is not entirely the fault of the Secretary of State but a little the fault of the current Secretary of State for Energy who started the nationalisation and the Industry Bill 1975. Perhaps it is also the fault of the other culprit—the Chancellor of the Exchequer, whose total failure of economic policy has almost brought this country to its knees. It is these two failures that have resulted in the present Government's industrial policies being in tatters.
However, even with that, the case for more money has not been made out. In replying to a Question of mine yesterday, the Minister said that the total sum of money committed under the Section 8 procedures was £435 million. On Second Reading in April, the Minister said that the level of expenditure under Section 8 might rise to £550 million by the end of this financial year. But the Government have got £550 million under the original 1972 Act, so why are they coming to the House in this extraordinary way? As my hon. Friend the Member for Bridgwater (Mr. King) so ably put it, the Bill has been subjected to a most extraordinary procedure. How well he described it.
However, this is a small Bill involving massive sums of money which my hon. Friends and I believe to be totally unnecessary. We know that the TUC is bludgeoning the Government into creating 11 million new jobs. I suppose that the natural reflex for any real Socialist Government, in reaction to this demand from the TUC to create these extra jobs, is to react, as the present Government are reacting, in the only way in which a Socialist Government know how to react—by spending more of the taxpayers' money. They have no more imagination and no policies other than just spending money like that.

Mr. F. A. Burden: Would not one of the best ways of increasing employment be to withdraw the poll tax? In present circumstances the extra poll tax means that before an employer starts to pay a man's wages he must find about £17 a week, and therefore it is cheaper for him to put people on overtime than to take on new employees on a sufficient scale.

Mr. Grylls: My hon. Friend is absolutely right. When the Government announced this extra £1,000 million impost on industry, the employers' contribution, a poll tax, we said that it would have a detrimental effect on industrial investment. We are seeing exactly what has happened. Part of this money is going to the accelerated project scheme announced by the Government earlier this year. I think that even the Minister will agree that this has had only modest success. Some £80 million of that has been taken up. It is described in rather lurid but amusing language in the

Investors Chronicle as the biggest rip-off ever. People will invest their money anyway. When they see that the Government will offer to pay one-third, they say "We shall take your money." That is the Government's only contribution to industrial policy.
It is not that the Opposition are saying that Governments in other countries do not help their industries. We know that they do in Germany, Japan and other countries. However, the difference is that in those competitor countries their Governments believe in the private enterprise principle. They do their best to ensure private enterprise wherever they can. The present British Government do not truly and honestly believe in private enterprise.

Mr. Flannery: Who would?

Mr. Grylls: Some of them want to believe in it, just for a short time. Some of them pretend that they are believing in it. Others say that they do not. I prefer that. At least one knows where one stands with them. My hon. Friend the Member for Bridgwater was talking about investment from overseas. Overseas investors look at the appearance of our industry. They judge by appearances. They do not add up the number of votes in the Cabinet as between the Left and the Right wings. They just get a general impression that the Labour Government are not very keen on private enterprise. The result of that is lack of confidence. One can hardly expect anything else.
Another worrying thing happened in July. Through the NEDC procedures, the Government—

Mr. Ron Thomas: Will the hon. Gentleman explain why there was a dramatic fall in sterling following the decision of the previous Conservative Government to float it and why we find a dramatic fall from then on, until that Conservative Government left office?

Mr. Grylls: Talk about the fall of sterling does not come well from the hon. Gentleman's lips. I do not think that his hon. Friends on the Treasury Bench will welcome him raising that point. When the Conservative Government left office the exchange rate for sterling was $2·30. That is not what it is now. It has dropped to nearly $1·50.


It may have dropped since the debate started, so I think that we should hear less from the hon. Gentleman about sterling in this respect.
I want to say a word about the NEDC. The sectoral studies of industry by employers and trade unions were welcomed by the Opposition. We were glad when the meeting in July produced 300 recommendations for doing away with bottlenecks and so on. We now have Labour's "Red Book", "Labour's Programme for Britain" for 1976—

Mr. Ron Thomas: Hear, hear.

Mr. Grylls: I am glad that the hon. Member for Bristol, North-West (Mr. Thomas) is with me. What does the good little book say about the sectoral studies of the employers and trade unions? They have been working together to try to solve the problems of industry in an entirely non-party political way and they have done it well. The little "Red Book" says that these 32 sectors are where public enterprise should seek to expand. Put in blunt English, that means that if those sectors co-operate with Government, Government will take them over or expand into their industry. If it means anything else I hope that hon. Gentlemen will get up and tell me. If those sectors co-operate with Government, the price of that co-operation is that the Government sooner or later will take them over. No wonder industry is reluctant to invest its own money.
Then there is another harebrained scheme from the Left wing, the National Executive Council, that certain companies should set aside a proportion of their profits for a centralised investment fund. Companies are not trusted. The profits they make by the efforts of their own management and work force must be put into a centralised pool. Mr. Big, the Minister, must tell them what to do with their profits. Such a plan is misconceived and thoroughly mischievous.
In considering the Bill, we have to hammer home the truth that companies will be able and willing to invest their own money only if the right climate is created by the Government of the day. That might seem the most obvious platitude but, my goodness, it is true. If a framework for successful investment can

be set by the Government, perhaps the Government need to do nothing else.
My hon. Friend the Member for Bridgwater referred to incentives for attracting skilled labour and his visit to Yorkshire. The NEDO report said that we need to attract and retain people with the skills that are needed. We want skilled manpower. How can we set about it? Incentives are crucial. Figures were produced recently which showed that industrial profitability had dropped from 13 per cent. to 2 per cent. The low profitability of industry and the high interest rates mean that people will not invest their money. The GEC has £250 million in cash earning 15½ per cent.—perhaps more. It cannot be right that encouragement should be given for that money to be left doing nothing. The Government's policies are at fault in driving up interest rates. That is one of the most damaging things the Government have done.
Last Friday I visited a small firm in my constituency which I knew wanted to expand. It had an IDC and planning permission for a new extension to the factory. I asked when the extension would be built, and I was told that it would not be built because the interest rate was 18 per cent. That is the sort of trouble that the Government have brought on themselves. That is why I said at the beginning that the collapse of the Government's industrial policy must be laid fairly and squarely at the door of the Chancellor of the Exchequer. He is the guilty man. I shall not attack the Secretary of State when he is not here. I do not believe that he is the real nigger in the woodpile. It is the central collapse of the Government's economic policy that is responsible for what is happening.
This Bill is physically rather insignificant, but financially it is grotesque. No case has been made out for it in terms of money needed, no explanation has been given to Parliament as to what has been done with money spent so far, and there has been no explanation of the achievements of various schemes—although we may be told a little more about that aspect in the Minister's reply.
The question of accountability has not been dealt with. The original Bill contained an Explanatory and Financial Memorandum to the effect that the Bill would increase the "total possible limit"


to £1,600 million. The Bill itself refers to making changes in the lump sum from £150 million to £600 million. There are then four separate occasions on which those sums can be further increased. Those occasions involve an increase from £100 million to £150 million. Therefore the Government thave added £600 million, and four lots of £250 million, reaching a total of £1,600 million.
I claim that the Government have already had two of those occasions—one in February 1975, and one in March 1976. Therefore, two of those occasions have passed. I do not see how in a Bill one can go back retrospectively and take account of earlier spending. Once a Statutory Instrument has been laid and claims are made under it, they cannot be undone and then increased.
I hope that if I put these points slowly to the Minister, he will receive some inspiration from his advisers in the Box. If the Minister discovers that the figure of £1,600 million should be instead a figure of £1,300 million, we shall be thankful. No doubt if there is such a revelation, the pound sterling may go in the right direction tomorrow. But I think that Parliament is entitled to an explanation.
I appreciate that when the Bill goes to the Lords it will be regarded as a money Bill and that their Lordships will have no power to amend such legislation. It will be too late to think about amendment at that stage. Therefore, we shall heave a sigh of relief if the Minister now discovers that the figure should be £1,300 million, because that will save a great deal of money.
This Bill is a financial extravaganza more suited to a Hollywood epic filmmaker than to a member of the Govern-meat. Legislation of this kind is rapidly bringing the country to the verge of bankruptcy. It is a disgraceful Bill to bring to Parliament at any time. It is a hundredfold more disgraceful to bring such a Bill before Parliament at this time of economic crisis. The Government should be ashamed of themselves. We know why the Secretary of State is not present for this debate. He must be lurking somewhere in the House, but he is certainly not in the Chamber. For all these reasons, I asked my right hon. and hon. Friends to perform a national

service by rejecting the Bill on Third Reading.

9.44 p.m.

Mr. Alan Williams: The Third Reading debate has been markedly different from the debates that took place earlier this afternoon. It has been a stimulating valuable and worthwhile debate. The hon. Member for Surrey, North-West (Mr. Grylls) asked whether the Government ever considered cutting expenditure. He might like to know that recently we made changes in regional development grants in respect of the mining industry. I assure him that many of his colleagues have been eager to assure me that I should not be making those cuts at all. It seems to me that Conservative Members are in favour of cuts in principle but against them in practice.
The aims of the Government, as we indicated in the Second Reading debate, have been to develop a flexible range of incentives which will enable us to undertake both counter-cyclical and general industrial policies, including modernisation and the stimulation of investment.
The hon. Member for Bridgwater (Mr. King), in opening for the Opposition, said that by the time the Conservatives left office—this was a demonstration of their virtue—of the £550 million they were allowed to spend, they had only spent £6 million. As I told the hon. Gentleman on Second Reading, that is the most incredible indictment of a Government who had to introduce the legislation because they had themselves generated a slide in investment, and never got the investment back to the real level it was at in 1970. Far from being a point of virtue, it is an astonishing revelation for the hon. Gentleman to put forward.
It was also said that there was no evidence that the Bill will be required until 1978. The hon. Member for Colne Valley (Mr. Wainwright) said that he would like more detailed information as to how the sums were arrived at. I hope the House will bear with me while I try to provide this, because it has been touched on by quite a few hon. Members. I shall try to cover all the points, although not necessarily in the sequence that hon. Members might wish. As we have an agreed timetable, I hope that they will be tolerant concerning interjections.
The current limit under the legislation would be £550 million, and, as was indicated by the Secretary of State in his speech on 29th April, at that stage the commitments to be counted against the legislation amounted to £315 million. Since that time, in six months, the figure has now arisen to £440 million—an increase of £125 million.
If we extrapolate ahead, it will be appreciated that it is highly unlikely that we shall reach the statutory limit by early 1977. This is why I dissent from the proposition that 1978 is the earliest date by which we shall need the money. Indeed, simply on the basis of existing measures, our estimate is that by 1980 the commitments will be about £1,100 million. That is without the introduction of any new measures such as may arise from the industrial strategy operations in the 39 sectors that were welcomed as being a valuable contribution.
It will be borne in mind that the offshore scheme which was introduced is an open-ended scheme, and we estimate that by 1980, of the £1,100 million, about £250 million will be made up by the offshore scheme.
Let me reiterate the points stressed on Second Reading, because tonight there has been far too much reference to actual spending. It should be remembered that much of this may eventually be by way of guarantees, rather than finance used. Much of it will be in loans, those loans being repayable. At the moment, although the commitments are for about £440 million—I gave the precise figures in a parliamentary answer yesterday—the actual payments to date amount only to £108 million; therefore, much of the commitment against ceiling is spending yet to come. The £440 million breaks down into £250 million for individual companies, of which the largest single element is the £162·5 million to Chrysler, to help a company in particular difficulties.
The hon. Member for Surrey, North-West asked whether we believed in private enterprise. I might point out to him that much of this money is going to support private enterprise and will do so in the future. Of the £440 million, £250 million is to individual companies and the balance of £190 million is on special schemes; for example, £80 million

has gone on the accelerated projects scheme, £35 million has been committed under the industry scheme on such things as the ferrous foundry scheme and so on, and £75 million is so far committed under the offshore scheme. That makes up the existing £440 million commitment.
The hon. Member for Basingstoke (Mr. Mitchell) asked how genuine jobs were created. He said that it was not possible for the Government to spot winners. I think that the success of the accelerated projects scheme refutes that proposition completely.
Hon. Members will bear in mind the objective of the accelerated projects scheme. Investment must be brought forward, it must be demonstrated to have been brought forward, and it must start by 30th November of this year. Applications have now closed, of course. So far, 106 offers have been made totalling £80 million and generating investments of £588 million. That is £588 million which has been brought forward into the trough situation. But by 1980, as a result of the projects covered by the accelerated projects scheme, we shall get an annual benefit on the balance of payments of £400 million. There will be 13,000 jobs either safeguarded or created as a result of this, and more than half the cost of the project—

Mr. David Mitchell: Mr. David Mitchell rose—

Mr. Williams: I explained just now that if hon. Members wanted a detailed explanation they would make matters easier for me if they did not attempt to intervene during the course of it.
Of the £588 million, more than half will be spent on plant and equipment in this country and, therefore, will generate further thousands of jobs in the plant and equipment supplying industries. The accelerated projects scheme is an excellent example of the good use of public funds. We are still processing further applications that were in by the closing date. These are for further assistance of about £17 million and can generate projects of about £100 million.

Mr. David Mitchell: Will the hon. Gentleman confirm that the 13,000 jobs to which he has referred have to be set against the 160,000 jobs that the Chancellor of the Exchequer will lose as a


result of the additional 2 per cent. on national insurance contributions?

Mr. Williams: I did not know that the hon. Member for Basingstoke was interested in playing silly games—[Interruption.] The hon. Member for St. Albans (Mr. Goodhew) does not know what the debate is about. We have hardly seen him throughout our proceedings. Hon. Members have asked me for details. I am doing my best to provide the information which the Opposition Front Bench and the hon. Member for Colne Valley, who has paid great attention to the Bill throughout its stages, have asked me.
The hon. Member for Surrey, North-West asked about the success of industry schemes. So far, assistance totalling £18 million has been offered and projects amounting to £95 million have arisen as a result of those offers. Since the Second Reading debate, when we announced what the existing industry schemes were, four new measures of industry schemes have been introduced. They are paper and board, printing machinery, textile machinery, and poultry meat processing.
The other question that the hon. Member was concerned about was the need not only to go beyond the £550 million but to get up to the figure of well over £1,000 million which the Bill will permit. Our legal advice is completely different from the hon. Member's, incidentally. The existing tranches can be subsumed in the first one. The £1,100 million is arrived at—

Mr. Tom King: The Bill refers to four occasions. Two have already happened. It may have been a fast ball to bowl at the Minister late at night, and he may have to look at this, but obviously this matter could be challenged. Our legal advice is that the Government have drawn their Bill wrongly and that what they think they have is not in fact in the Bill.

Mr. Williams: I do not think that the hon. Member is correct, nor do my legal advisers, but even if he were, we should still think it right to go for the level that would then be indicated, even if we had subsequently to make a change, for the reasons that I am about to explain to the hon. Member for Colne Valley.
As I have said, £440 million is permitted and we expect to reach the current ceiling early next year. A further £200 million will probably eventually be allocated to British Leyland as stated in the public expenditure White Paper. Another £200 million is likely to go on the hon. Member's own offshore scheme. I am not condemning it—it is a very good scheme, doing good work—but that is another £200 million. The balance is likely to go on further Section 8 industry schemes, such as ferrous foundry and so on, and those which will emerge from the discussions with industry.
I apologise to the House for all that detail thrown out in a hurry, but hon. Members wish to get away. On the other hand, I think that I have given all the data for which hon. Members asked. I am a little surprised, in view of the debates in Committee, that we heard so little today about the problems of small firms. Conservative Members made great play with that in Committee but no doubt those who look after the interests of small firms will note that their wish to get their hon. Friends away to the sleepers overcame their wish to press the case of those in small industries.
I ask Opposition Members to bear one thing in mind when they return to their constituencies this weekend, on those very same sleepers. If, as they apparently wish to do, they turned down a Third Reading for the Bill, the ceiling under the existing legislation would be reached early next year. From then on there would be no further Section 8 money available for industry.
I hope that Conservative Members will tell the people of Workington, for example, that for them there will be no hope of a further 16 projects and a further 650 jobs under Section 8. I hope that they will tell the people of Walsall and the West Midlands of the effect that their vote tonight would have on the car industry, on the car components suppliers, and on the very small firms which depend on the existence of that car industry.
What will happen in Walsall and the West Midlands if hon. Members carry the vote tonight? No doubt they will search their own consciences and their constituents will search their voting records. In this debate, we have become involved in the religious war that is


going on in the Conservative Party. They are still fighting the fight they fought way back in 1972. It still rankles with the hon. Member for Circencester and Tewkesbury (Mr. Ridley) that, as the then Minister for Aerospace revealed, seven Ministers in the Department were not even consulted when the Tory Industry Act was being prepared and their officials were debarred from giving them

the necessary briefing. That information was concealed. Hon. Members are willing to deny industry finance it urgently needs, to deny people work, in pursuit of an out-of-date squabble with their ex-Leader.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 265, Noes 246.

Division No. 355]
AYES
[9.59 p.m.


Abse, Leo
Dunnett, Jack
Lever, Rt Hon Harold


Allaun, Frank
Eadle, Alex
Lewis, Arthur (Newham N)


Anderson, Donald
Edge, Geoff
Lipton, Marcus


Archer, Peter
Edwards, Robert (Wolv SE)
Lomas, Kenneth


Armstrong, Ernest
Ellis, John (Brigg &amp; Scun)
Loyden, Eddie


Ashley, Jack
English, Michael
Luard, Evan


Ashton, Joe
Evans, Fred (Caerphilly)
Lyons, Edward (Bradford W)


Atkins, Ronald (Preston N)
Evans, loan (Aberdare)
Mabon, Dr J. Dickson


Atkinson, Norman
Ewing, Harry (Stirling)
McCartney, Hugh


Bagier, Gordon A. T.
Faulds, Andrew
McDonald, Dr Oonagh


Barnett, Guy (Greenwich)
Fitch, Alan (Wigan)
McElhone, Frank


Barnett, Rt Hon Joel (Heywood)
Fitt, Gerard (Belfast W)
McGuire, Michael (Ince)


Bates, Alt
Flannery, Martin
MacKenzie, Gregor


Benn, Rt Hon Anthony Wedgwood
Fletcher, L. R. (Ilkeston)
Mackintosh, John P.


Bennett, Andrew (Stockport N)
Fletcher, Ted (Darlington)
Maclennan, Robert


Bidwell, Sydney
Ford, Ben
McMillan, Tom (Glasgow C)


Bishop, E. S.
Forrester, John
McNamara, Kevin


Blenkinsop, Arthur
Fowler, Gerald (The Wrekin)
Madden, Max


Boardman, H.
Fraser, John (Lambeth, N'w'd)
Magee, Bryan


Booth, Rt Hon Albert
Freeson, Reginald
Mahon, Simon


Bottomley, Rt Hon Arthur
Garrett, John (Norwich S)
Mallalieu, J. P. W.


Boyden, James (Bish Auck)
George, Bruce
Marks, Kenneth


Bradley, Tom
Gilbert Dr John
Marquand, David


Bray, Dr Jeremy
Ginsburg, David
Marshall, Dr Edmund (Goole)


Brown, Hugh D. (Provan)
Golding John
Marshall, Jim (Leicester S)


Brown, Robert C. (Newcastle W)
Gould Bryan
Mason, Rt Hon Roy


Brown, Ronald (Hackney S)
Gourlay, Harry
Maynard, Miss Joan


Buchan, Norman
Graham, Ted
Mellish, Rt Hon Robert




Mikardo, Ian


Buchanan, Richard
Grant, John (Islington C)



Butler, Mrs Joyce (Wood Green)
Hamilton, James (Bothwell)
Millan, Rt Hon Bruce




Miller, Dr M. S. (E.Kilbride)


Callaghan, Rt Hon J. (Cardiff SE)
Hardy, Peter
Moon man Eric


Callaghan, Jim (Middleton &amp; P)
Harrison, Walter (Wakefield)



Campbell, Ian

Morris, Alfred (Wythenshawe)


Canavan, Dennis
Hart, Rt Hon Judith
Morris, Charles R. (Openshaw)


Cant, R. B.
Hattersley, Rt Hon Roy
Morris, Rt Hon J. (Aberavon)


Carmichael, Neil
Hatton, Frank
Moyle, Roland



Healy Rt Hon Denis



Carter-Jones, Lewis
Heffer, Eric S.
Mulley, Rt Hon Frederick


Cartwright, John

Murray, Rt Hon Ronald King


Clemitson, Ivor
Hooley, Frank
Newens, Stanley


Cocks, Rt Hon Michael
Horam, John
Oakes, Gordon


Cohen, Stanley
Howell, Rt Hon Denis (B'ham, Sm H)
Ogden, Eric


Coleman, Donald
Huckfield, Les
O'Halloran, Michael


Colquhoun, Ms Maureen
Hughes, Rt Hon C. (Anglesey)
Orbach, Maurice


Conlan, Bernard
Hughes, Robert (Aberdeen N)
Ovenden, John


Cook, Robin F. (Edin C)
Hughes, Roy (Newport)
Owen, Rt Hon Dr David


Corbett, Robin
Hunter, Adam
Padley, Walter


Cox, Thomas (Tooting)
Irvine, Rt Hon Sir A. (Edge Hill)
Park, George


Craigen, J. M. (Maryhill)
Jackson, Miss Margaret (Lincoln)
Parker, John


Crawshaw, Richard
Janner, Grevitle
Parry, Robert


Cronin, John
Jay, Rt Hon Douglas
Pavitt, Laurie


Crosland, Rt Hon Anthony
Jeger, Mrs Lena
Perry, Ernest


Crowther, Stan (Rotherham)
Jenkins, Hugh (Putney)
Phipps, Dr Colin


Cryer, Bob
John, Brynmor
Price, C. (Lewisham W)


Cunningham, G. (Islington S)
Johnson, James (Hull West)
Price, William (Rugby)


Davidson, Arthur
Johnson, Walter (Derby S)
Radice, Giles


Davies, Bryan (Enfield N)
Jones, Alec (Rhondda)
Rees, Rt Hon Merlyn (Leeds S)


Davies, Denzil (Llanelli)
Jones, Barry (East Flint)
Roberts, Albert (Normanton)


Davies, Ifor (Gower)
Jones, Dan (Burnley)
Roberts, Gwilym (Cannock)


Davis, Clinton (Hackney C)
Judd, Frank
Robinson, Geoffrey


Deakins, Eric
Kaufman, Gerald
Roderick, Caerwyn


Dean, Joseph (Leeds West)
Kelley, Richard
Rodgers, George (Chorley)


Dell, Rt Hon Edmund
Kilroy-Silk, Robert
Rodgers, Rt Hon William (Stockton)


Dempsey, James
Lamborn, Harry
Rooker, J. W.


Doig, Peter
Lamond, James
Roper, John


Dormand, J. D.
Latham, Arthur (Paddington)
Rose, Paul B.


Douglas-Mann, Bruce
Leadbitter, Ted
Ross, Rt Hon W. (Kilmarnock)


Duffy, A. E. P.
Lee, John
Rowlands, Ted


Dunn, James A.
Lestor, Miss Joan (Eton &amp; Slough)
Ryman, John




Sandelson, Neville
Thomas, Dafydd (Merioneth)
Wellbeloved, James


Sedgemore, Brian
Thomas, Jeffrey (Abertillery)
White Frank R. (Bury)


Selby, Harry
Thomas, Mike (Newcastle E)
White, James (Pollock)


Shaw, Arnold (Ilford South)
Thomas, Ron (Bristol NW)
Whitehead, Phillip


Sheldon, Robert (Ashton-u-Lyne)
Thorne, Stan (Preston South)
Whitlock, William


Shore, Rt Hon Peter
Tierney, Sydney
Willey, Rt Hon Frederick


Short, Mrs Renée (Wolv NE)
Tinn, James
Williams, Alan (Swansea W)


Silkin, Rt Hon John (Deptford)
Tomlinson, John
Williams Alan Lee (Hornch'ch)


Silkin, Rt Hon S. C. (Dulwich)
Tomney, Frank
Williams Rt Hon Shirley (Hertford)


Stiverman, Julius
Torney, Tom
Williams, Sir Thomas (Warrington)


Skinner, Dennis
Tuck, Raphael
Wilson, Alexander (Hamilton)


Smith, John (N Lanarkshire)
Urwin, T. W.
Wilson, Rt Hon Sir Harold (Huyton)


Spearing, Nigel
Varley, Rt Hon Eric G.
Wilson, William (Coventry SE)


Spriggs, Leslie
Wainwright, Edwin (Dearne V)
Wise, Mrs Audrey


Stallard, A. W.
Walden, Brian (B'ham, L'dyw'd)
Woodall, Alec


Stoddart, David
Walker, Harold (Doncaster)
Woof, Robert


Stott, Roger
Walker, Terry (Kingswood)
Wrigglesworth, Ian


Strang, Gavin
Ward, Michael
Young, David (Bolton E)


Strauss, Rt Hon G. R.
Watkins, David



Summerskill, Hon Dr Shirley
Watkinson, John
TELLERS FOR THE AYES:


Swain, Thomas
Weetch, Ken
Mr. Joseph Harper and


Taylor, Mrs Ann (Bolton W)
Weitzman, David
Mr. Peter Snape




NOES


Adley, Robert
Farr, John
Kimball, Marcus


Alison, Michael
Fell, Anthony
King, Evelyn (South Dorset)


Amery, Rt Hon Julian
Finsberg, Geoffrey
King, Tom (Bridgwater)


Arnold, Tom
Fisher, Sir Nigel
Kitson Sir Timothy


Atkins, Rt Hon H. (Spelthorne)
Fletcher-Cooke, Charles
Knight, Mrs Jill


Awdry, Daniel
Fookes, Miss Janet
Knox, David


Baker, Kenneth
Forman, Nigel
Lamont, Norman


Banks, Robert
Fowler, Norman (Sutton C'f'd)
Lane, David


Bell, Ronald
Fox, Marcus
Langford-Holt, Sir John


Bennett, Sir Frederic (Torbay)
Fraser, Rt Hon H. (Stafford &amp; St)
Latham, Michael (Melton)


Bennett, Dr Reginald (Fareham)
Freud, Clement
Lawrence, Ivan


Benyon, W.
Fry, Peter
Lawson, Nigel


Berry, Hon Anthony
Gardner, Edward (S Fylde)
Lester, Jim (Beeston)


Bitten, John
Gilmour, Rt Hon Ian (Chesham)
Lewis, Kenneth (Rutland)


Biggs-Davison, John
Gilmour, Sir John (East Fife)
Lloyd, Ian


Blaker, Peter
Glyn, Dr Alan
Loveridge, John


Body, Richard
Godber, Rt Hon Joseph
Luce, Richard


Boscawen, Hon Robert
Goodhart, Philip
McAdden, Sir Stephen


Bottomley, Peter
Goodhew, Victor
McCrindle, Robert


Bowden, A. (Brighton, Kemptown)
Goodlad, Alastair
Macfarlane, Nell


Boyson, Dr Rhodes (Brent)
Gorst, John
MacGregor, John


Braine, Sir Bernard
Gow, Ian (Eastbourne)
Macmillan, Rt Hon M. (Farnham)


Brittan, Leon
Gower, Sir Raymond (Barry)
McNair-Wilson, P. (New Forest)


Brocklebank-Fowler, C.
Grant, Anthony (Harrow C)
Madel, David


Brotherton, Michael
Gray, Hamish
Marten, Nell


Brown, Sir Edward (Bath)
Grieve, Percy
Mates, Michael


Bryan, Sir Paul
Griffiths, Eldon
Mather, Carol


Buchanan-Smith, Alick
Grimond, Rt Hon J.
Maude, Angus


Buck, Antony
Grist, Ian
Mawby, Ray


Budgen, Nick
Grylls, Michael
Maxwell-Hyslop, Robin


Bulmer, Esmond
Hall, Sir John
Mayhew, Patrick


Burden, F. A.
Hall-Davis, A. G. F.
Meyer, Sir Anthony


Butler, Adam (Bosworth)
Hamilton, Michael (Salisbury)
Miller, Hal (Bromsgrove)


Carlisle, Mark
Hampson, Dr Keith
Mills, Peter


Chalker, Mrs Lynda
Hannam, John
Miscampbell, Norman


Channon, Paul
Harvie Anderson, Rt Hon Miss
Mitchell, David (Basingstoke)


Churchill, W. S.
Hastings, Stephen
Moate, Roger


Clark, Alan (Plymouth, Sutton)
Havers, Sir Michael
Monro, Hector


Clark, William (Croydon S)
Hawkins, Paul
Moore, John (Croydon C)


Clarke, Kenneth (Rushcliffe)
Hayhoe, Barney
More, Jasper (Ludlow)


Clegg, Walter
Health, Rt Hon Edward
Morgan, Geraint


Cooke, Robert (Bristol W)
Heseltine, Michael
Morgan-Giles, Rear-Admiral


Cope, John
Hicks, Robert
Morris, Michael (Northampton S)


Cordle, John H.
Higgins, Terence L.
Morrison, Charles (Devizes)


Corrle, John
Holland, Philip
Morrison, Hon Peter (Chester)


Costain, A. P.
Hooson, Emlyn
Mudd, David


Craig, Rt Hon W. (Belfast E)
Hordern, Peter
Neave, Airey


Critchley, Julian
Howe, Rt Hon Sir Geoffrey
Nelson, Anthony


Crowder, F. P.
Howell, David (Guildford)
Neubert, Michael


Davies, Rt Hon J. (Knutstord)
Hunt, David (Wirral)
Newton, Tony


Dean, Paul (N Somerset)
Hunt, John (Bromley)
Nott, John


Dodsworth Geoffrey
Hurd, Douglas
Onslow, Cranley


du Cann, Rt Hon Edward
Hutchison, Michael Clark
Oppenheim, Mrs Sally


Dykes, Hugh
Irving, Charles (Cheltenham)
Page, John (Harrow West)


Eden, Rt Hon Sir John
James, David
Page, Rt Hon R. Graham (Crosby)


Edwards, Nicholas (Pembroke)
Jessel, Toby
Penhaligon, David


Elliott, Sir William
Johnson Smith. G. (E Grinstead)
Percival, Ian


Emery, Peter
Jones, Arthur (Daventry)
Peyton, Rt Hon John


Eyre, Reginald
Jopling, Michael
Pink, R Bonner


Fairbairn, Nicholas
Joseph, Rt Hon Sir Keith
Powell, Rt Hon J. Enoch


Fairgrieve, Russell
Kershaw, Anthony
Price, David (Eastleigh)




Pym, Rt Hon Francis
Shepherd, Colin
Thomas, Rt Hon P. (Hendon S)


Raison, Timothy
Shersby, Michael
Townsend, Cyril D.


Rathbone, Tim
Silvester, Fred
Trotter, Neville


Rawlinson, Rt Hon Sir Peter
Sims, Roger
Tugendhat, Christopher


Rees, Peter (Dover &amp; Deal)
Sinclair, Sir George
van Straubenzee, W. R.


Renton, Rt Hon Sir D. (Hunts)
Smith, Dudley (Warwick)
Vaughan, Dr Gerard


Renton, Tim (Mid-Sussex)
Speed, Keith
Viggers, Peter


Ridley, Hon Nicholas
Spence, John
Wainwright, Richard (Colne V)


Ridsdale, Julian
Spicer, Michael (S Worcester)
Wakeham, John


Rifkind, Malcolm
Sproat, lain
Wall, Patrick


Rippon, Rt Hon Geoffrey
Stanbrook, Ivor
Walters, Dennis


Roberts, Michael (Cardiff NW)
Stanley, John
Warren, Kenneth


Roberts, Wyn (Conway)
Steen, Anthony (Wavertree)
Weatherill, Bernard


Rodgers, Sir John (Sevenoaks)
Stewart, Ian (Hitchin)
Wells, John


Ross, Stephen (Isle of Wight)
Stokes, John
Wiggin, Jerry


Rossi, Hugh (Hornsey)
Stradling Thomas, J.
Winterton, Nicholas


Rost, Peter (SE Derbyshire)
Tapsell, Peter
Wood, Rt Hon Richard


Royle, Sir Anthony
Taylor, R. (Croydon NW)
Young, Sir G. (Ealing, Acton)


Sainsbury, Tim
Taylor, Teddy (Cathcart)



St. John-Stevas, Norman
Tebbit, Norman
TELLERS FOR THE NOES:


Scott, Nicholas
Temple-Morris, Peter
Mr. Spencer Le Marchant and


Shaw, Giles (Pudsey)
Thatcher, Rt Hon Margaret
Mr. Cecil Parkinson


Shelton, William (Streatham)

Question accordingly agreed to.


Bill read the Third time and passed.

Orders of the Day — BUSINESS OF THE HOUSE

Ordered,
That, at this day's Sitting, the Consideration of Lords Amendments to the Local Government (Miscellaneous Provisions) Bill may be proceeded with, though opposed, until any hour.—[Mr. Tinn.]

Orders of the Day — LOCAL GOVERNMENT (MISCELLANEOUS PROVISIONS) BILL

Lords amendments in lieu of one of their amendments to which the Commons have disagreed, considered.

The Lords do not insist on their amendment in page 7, line 34, to which the Commons have disagreed, but propose the following amendments to the Bill in lieu thereof—

Orders of the Day — New Clause A

CONTROL OF ROAD-SIDE SALES

Lords amendment: No. 1, in page 7, line 34, at end insert Clause A:

"A.—(1) If a highway authority considers that, for the purpose of avoiding danger on or facilitating the passage of traffic over a highway for which it is the highway authority, it is appropriate to make an order under this subsection in respect of the highway, the authority may make an order (hereafter in this section referred to as a "control order") specifying the highway and providing that, subject to subsection (5) of this section—

(a) no person shall sell anything on the highway or offer or expose anything for sale on the highway; and
(b) no person shall, for the purpose of selling anything or offering or exposing anything for sale on the highway or of attracting from users of the highway offers to buy anything, put, keep or use on the highway, or on land within fifteen metres from any part of the highway, any stall or similar structure or any container or vehicle.

(2) The highway authority for a highway in respect of which a control order is in force may vary or revoke the order by a subsequent order.

(3) Section 84C(1) to (5) and (6) of the Road Traffic Regulation Act 1967 (which relate to the procedure for making orders under the provisions of that Act mentioned in subsections (1) and (5) of that section) shall have effect as if subsections (1) and (2) of this section were included among those provisions.

(4) If a person contravenes a control order which is in force for a highway, the highway authority for the highway may by a notice served on him require him not to contravene

the order after a date specified in the notice (which must not be before the expiration of the period of 7 days beginning with the date of service of the notice); and—

(a) if a person on whom a notice relating to a contravention of a control order is served in pursuance of this subsection contravenes the order after the expiration of that period, or causes, permits or procures another person to contravene it after the expiration of that period, he shall be guilty of an offence and liable on summary conviction to a fine not exceeding £50;
(b) if a contravention in respect of which a person is convicted of an offence in pursuance of the preceding paragraph is continued by him after the expiration of the period of 7 days beginning with the date of the conviction he shall, as respects each day on which the contravention is so continued, be guilty of a further offence and liable on summary conviction to a fine not exceeding £10.

(5) A control order does not apply—

(a) to anything done at premises used as a shop or petrol filling station either—

(i) in pursuance of planning permission granted or deemed to be granted under the Town and Country Planning Act 1971, of
(ii) in a case where the premises are, without such permission, lawfully used as a shop or petrol filling station, or
(iii) without prejudice to the generality of sub-paragraph (ii) above, in a case where by virtue of section 87 of that Act (which relates to enforcement notices) an enforcement notice in respect of that use of the premises cannot be served;

(b) to anything done at a market in respect of which tolls, stallages or rents are payable;
(c) to the sale, offer or exposure for sale of things from or on a vehicle which is used only for the purpose of itinerant Lading with the occupiers of premises or which is used only for that purpose and for purposes other than trading;
(d) to such a vehicle as is mentioned in the preceding paragraph or to containers on the vehicle;
(e) to, or to containers used in connection with, the sale, offer or exposure for sale, by or on behalf of the occupier of land used for agriculture and on that land, of agricultural produce produced on that land;
(f) to the provision, in a lay-by situated on a highway, of facilities for the purchase of refreshments by persons travelling on the highway or on another highway near to the highway;
(g) to anything as respects which the control order provides that the order is not to apply to it.

In paragraph (e) of this subsection "agriculture" and "agricultural" have the same meanings as in the Agriculture Act 1947.

(6) References in the preceding provisions of this section to a control order are, in the


case of a control order which has been varied in pursuance of subsection (2) of this section, references to the order as so varied."

10.16 p.m.

The Under-Secretary of State for the Environment (Mr. Guy Barnett): I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Oscar Murton): With this amendment we are to discuss Lords Amendment No. 2.

Mr. Barnett: The House will no doubt remember that when it considered the amendments made to this Bill in the other place, it disagreed with a new clause designed to control roadside trading in England and Wales.
That clause, which was inserted against Government advice, would, broadly speaking, have prohibited the sale of food and articles on the verges and laybys of all trunk and principal roads in England and Wales, and enabled highway authorities, by order, to prohibit such sales on other roads. Although certain produce and premises would have been exempt from control the ban would have applied automatically and extended for a distance of 15 yards on either side of the road.
The Government found the clause unacceptable for two main reasons. First, it contained no element of discretion. It would have imposed a blanket ban on roadside trading on all major roads in the country whether a problem existed to be dealt with or not, regardless of the wishes of the local authority. Secondly, it would have had a detrimental effect on the provision of refreshments for travellers, and particularly for lorry drivers.
In the previous debate in this House on 3rd August the hon. Member for Ashford (Mr. Speed) and the hon. Member for Hove (Mr. Sainsbury) supported the former clause in principle. They spoke of the need for a general provision to replace the many private Act provisions which, they said, are well used by local authorities. They referred to the lack of hygiene, the litter and the road safety aspect of uncontrolled roadside trading. I agree that certain types of roadside trading need some measure of control and, as requested by the hon. Members opposite, we have been considering how this can be achieved without running up

against the objections that I mentioned earlier.
The new clause before the House is the result of our deliberations and represents, I think, the best approach to the problem. Its most notable feature is, in my view, its more reasonable application. It avoids a general ban and gives discretion to apply control to the highway authority. If the authority decides that trading activities on a particular stretch of road are causing problems it may make an order prohibiting the sale of goods on a length of road specified in the order. But first it must advertise its proposals and consider representations in the same manner as if the control order had been made under the Road Traffic Regulation Act 1967. A control order may not apply to certain people who we believe have a right to be exempted—the farmer selling produce from his land adjoining the road, the itinerant trader, and people running mobile canteens and the like catering for lorry drivers and other road users.
It is difficult—perhaps impossible—to provide a clause in national legislation which satisfactorily regulates every kind of roadside trading activity. Some kinds of activity need control, others do not. Many different interests are involved. Road users want roads to be safe. They also want places where they can stretch their legs and buy a drink or a snack. On the other hand, local residents may resent their areas being cluttered with litter simply to meet the needs of travellers who are only passing through.
The clause attempts to deal with these various requirements and to prevent the need for each local authority which wants powers to restrict roadside trading from seeking them in local Bills. As such it is squarely in line with the principles underlying the Bill. I hope the House will agree that the procedure set out in the clause provides the best possible solution to a most difficult problem, and I commend it to the House. I should add that the second amendment is entirely consequential.

Mr. Tim Sainsbury: I am glad that the Minister has been able to come back to us and honour what I might call his pledge to take note of what was said in our earlier debate. He said that this was the best possible solution, but I do not entirely agree. However, it is much


better than having no power to deal with this difficult problem, particularly in regard to the generation of litter.
I hope that he can assure us, since the power rests with the highway authority, that where the highway authority is not the local authority, if the local authority makes representations to the Department, the Department will listen and will bring forward an order where that seems appropriate.
The advantage of the clause in enabling litter to be, if not eliminated, at least concentrated so that it can be more easily and cheaply removed is considerable. I welcome the clause and hope that it will be effectively implemented not only by the local authorities, but by the Department.

Mr. Keith Speed: I, too, wish to thank the Minister and another place for bringing us back to this subject. We do not often have this procedure in which we consider a Lords amendment in lieu of one which this House has thrown out.
The amendment is a compromise and does not go all the way—certainly not as far as the Association of County Councils would like—but it would be churlish not to acknowledge the effort made by the Minister to meet the points raised by my hon. Friends in this House and by their Lordships. I do not quarrel with the exemptions. The amendment has probably got it about right. This is an open-ended matter. I am, perhaps, being slightly traditional when I say that I am less happy about the appearance of 15 metres rather than 15 yards in the Bill. The Minister may or may not agree with me. I welcome the greater discretion given to local authorities in the new clause.
If we are dealing with trunk roads, we shall be dealing with regional controllers. In my experience, they are extremely competent and knowledgeable men who will be extremely co-operative when a local authority makes an application. However, if there were to be difficulties, perhaps on a technical argument or for some other reason, I presume that the local authority could go to the Secretary of State. I hope that this will not need to happen. but there may be difficulties, and, as the Secretary of State makes the decision, I presume that a local authority

could go to him, at least informally, to get the matter sorted out. I hope that the House will agree with the Lords amendments.

Mr. Guy Barnett: Both hon. Members have referred to regional controllers who will undoubtedly take very seriously representations from county councils. They are concerned with safety, the unobstructed passage of traffic and the avoidance of nuisance on trunk roads. If a county can demonstrate its problem and intends to make control orders covering its principal roads, it is hard to imagine a regional controller holding out against making an order for trunk roads. I hope that clears up any doubts which may have existed.

Question put and agreed to.

Subsequent Lords amendment agreed to.

CUSTOMS AND EXCISE

Resolved.
That the Countervailing Duty Order 1976 (S.I., 1976, No. 1179), a copy of which was laid before this House on 28th July, be approved.—[Mr. Tinn.]

Orders of the Day — WORKS OF ART (EXPORT)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Tinn.]

10.24 p.m.

Mr. Hugh Jenkins: I rise to draw attention to Command 6624, "The Export of Works of Art", which is the 21st report of the Reviewing Committee on the Export of Works of Art, whose task it is to advise on whether export licences should be refused for any particular object or objects because of its or their national importance. In doing so I express my warm appreciation to Mr. Speaker for having been good enough to select this subject for this short Adjournment debate.
The committee does a useful job, but unfortunately, in the past two years or more under its previous chairman, Lord Perth, the committee took up a political stance. Its reports, instead of being factual statements of the work of the committee, became pieces of propaganda


against the Labour Government's proposed wealth tax.
If I had remained Minister for the Arts, I should have refused to recommend the present report to the Secretary of State for publication. My successor has accepted the report and published it in all its tendentious inaccuracy. However, he has carried on what I started and substituted another chairman for the Earl of Perth, and he has endorsed the changes that I initiated in the membership of the committee.
Today all the names at the head of the report are gone save one and with one exception we have a new committee under Professor John White, who is the new chairman. In fact, he was one of my appointments when I was Minister, Any remarks I may make that suggest that the report is not all that one might wish should not be taken as reflecting upon the present committee. I hope and believe that the committee's new men—I am sorry that there are no women judged to be capable of advising the Government on these matters—will revert to their proper role and that the committee not see itself as a stick to beat the Socialists on behalf of wealthy owners of art property.
The present report falls under two heads. First, there is the anti-Socialist propaganda, which might have been rejected by Tory Central Office as rather too extreme. It is odd that such a publication should be presented to Parliament by a Socialist Secretary of State, Secondly, there is the factual part, which is an excellent account that bears no relationship to the propagandist introduction.
Adam Smith once said that dealers were
an order of men whose interest is never exactly the same as the public's, and who generally have an interest to deceive and even to oppress the public.
Last year the campaign staged by dealers and their wealthy clients against the application of the proposed wealth tax on works of art showed just how true his words were. Time and again the dealers claimed that if the wealth tax were introduced and applied in any form to works of art, it would lead to the
dispersal of our national heritage within a generation.

One hysterical collector even claimed that the Government's wealth tax proposal was on a par with ordering that the heads be lopped off the carvings of medieval saints.
There was not one shred of evidence to support such ridiculous views. The reverse case—that the wealth tax if applied to works of art would lead to increased public access to significant works and could therefore be said to be extending the national heritage in any meaningful sense of the term—was convincingly argued by those who, though interested in the arts, did not personally stand to lose anything financially if such a tax were introduced.
A division of opinion along these lines was only to be expected. Wealthy aristocrats, millionaire art collectors, Mayfair dealers and auctioneers, not to mention a tiny minority of very rich artists, are bound to attempt to defend their material interests when they are threatened. Understandably, too, they will try as hard as they can to pretend that such interests are indistinguishable from the national interest and even essential for the survival of certain ill-defined cultural values. However, I think that most intelligent people and reasonable people are well able to see what lies behind these arguments. They treat them with the derision that they deserve. The only people who are deceived are the deceivers. They honestly believe that they are acting out of a desire to preserve the national heritage when all they are doing is seeking to keep as much art as possible in the hands of a wealthy minority.
It is one thing to expect and to smile at the self-interestedness of the excessively rich posing as what is best for us all in the letters pages of the national Press or even during the course of a Select Committee, but it is quite another to encounter it in an official report compiled by a Government committee and presented to Parliament by the Secretary of State. The report clearly states that the export control of art during the period under review was carried out
against a background of our economic difficulties and of significant changes in taxation, actual or proposed.
In fact. that is an understatement. During the period covered there was a nationwide debate about the possible effects of


a wealth tax on the national heritage. Anyone who owned an important work of art would open his newspaper on almost any morning and find set out every conceivable argument why it was in his financial interest to export it without delay.
Were owners convinced by such arguments? Apparently not. Not so much as the first drop or trickle of the much heralded flood of standard works of art abroad was discernible. The committee found that none of the allegedly disruptive factors had any effect on the type or amount of works which were being referred to it for review.
Does the report therefore put to rest the fiction of the dispersal of the national heritage or does it properly ignore it? Regrettably not. The committee went on to state:
Nothing which has happened since our last report has in any way altered our view that a wealth tax on works of art presents a serious threat to the national heritage of this country and would lead to pressure to sell works of art which would, it is to be feared, mainly go overseas.
In defence of this claim, the report produces not one jot or tittle of evidence. Indeed, it had something of a hard time trying to discount on the data supporting the contrary view to which it is required to refer.
Thus, it correctly points out that the Customs and Excise figures of total imports and exports of works of art appear to point towards the "comfortable conclusion" that the trade in important works is roughly in balance. About the same number and value of such works leave the country as are imported into it each year. But the committee is unwilling to accept this finding. It states:
Our own knowledge of the art market as well as our experience as members of the Committee leads us to the conclusion that items of heritage quality are leaving Britain in greater numbers and to a higher value than are being brought in by comparable imports…We are sure that the losses of great works of art to the country far exceed any gains.
Sure on what grounds? Are we supposed to conclude that ex-members of the committee knew about secret, unauthorised, exportation of heritage standard works by corrupt elements within the art trade? If so, why are there no facts to support this argument? Why have they not made a full report

about these matters to the Government? Why have they not told the police and the Customs and Excise authorities? Can it be that this certainty about a gross annual deficit of heritage quality works is nothing but an attempt to fabricate evidence of the most dubious kind against the introduction of a wealth tax which, though it would leave the national heritage unscathed, might personally affect ex-members of the committee should it be implemented?
The facts, as can easily be discovered by a careful reading of the report, are that during the 12 months under review a total of only 21 cases was even considered after reference to the committee because expert advisers had recommended that a licence to export should be refused on grounds of national importance. Of those 21, the committee found it necessary to suspend export licences in only 12. In only four were insufficient funds to be found in Britain, with the result that they went abroad. Those four objects are the molehill on which this mountain of argument against the wealth tax has been constructed.
In case it is thought that these items were of momentous importance, among the object which the committee no doubt correctly felt it was desirable to keep in Britain was an Anglo-Saxon brooch valued at £1,323. This was eventually acquired by Prittlewell Priory Museum. In other words, even by applying such a fine-toothed comb as this to applications for export the committee recommended that export licences should be refused in 12 cases. Those 12, except for the four to which I have referred, were retained in this country.
The four items were a pair of silver gilt claret jugs of 1685, a nineteenth century vase, a pair of pistols of 1730, and an eighteenth century pottery group. They were valuable and good objects but hardly represent a flood of valuable art which the threat of a wealth tax was supposed to create.
The committee argued against a wealth tax in its introductory section, unmindful that the argument was without foundation. I hope that we shall not see this kind of report again. It was wrong to speak of the proposed wealth tax being a potential disaster to the national heritage. It was irresponsible of the committee to


suggest that this was happening when its own figures show that it was not.
The figures indicate that a slight increase in the total value of all works of art exported occurred last year and that exports marginally exceeded imports. But there is no need for us to endeavour to keep within the country every work of art regardless of quality. We do a substantial trade in art and many of our exports are re-exports.
The report of the Reviewing Committee does not do justice to its own work. I hope that we will not use HMSO in future to produce this sort of argument at the taxpayers' expense.
The Committee does a useful and essential job. Its future reports should be about that job. There are persons and organisations who are as dedicated in their opposition to the wealth tax as Lord Perth and the committee members, and such persons have at their command many instruments of public information through which they can develop their arguments. They should not use the report of the Reviewing Committee.
I congratulate my successor, the Minister for the Arts, on the drastic changes that he has made in the membership of the Reviewing Committee. My successor is a gentle person who would probably attribute these changes to the effluxion of time. Some of us know that time had to be given a push and we do not wish to deprive him of the credit for accepting the good advice which was given him.
I wish the new committee every success in its work. I do not wish to deprive Lord Perth of any credit for the work that he has done—he is a courteous and charming man—but I do not withdraw anything that I have said about the use of the committee for propaganda—I feel my comments are justified.
I realise that the Minister will be answering the debate under some difficulty, but I hope that he will recognise that my purpose in raising the matter is to deprecate the wrong use of the work of the Reviewing Committee but to recognise the value of its real work, to welcome it and to wish the new committee every success.

10.39 p.m.

Mr. Robert Cooke: I hope that the Minister will address him-

self to the work of the Reviewing Committee and this serious problem. The Conservative Party rejects every sentiment expressed by the hon. Member for Putney (Mr. Jenkins). His speech was a travesty of the facts and we share Lord Perth's grave alarm about this matter.
I do not want to intrude further into the debate because we want to hear what the Minister has to say. However, can the Minister give an example of any work of art of real national importance which has been imported into this country during the period in question?

10.40 p.m.

The Minister of State, Department of Education and Science (Mr. Gordon Oakes): I am grateful to my hon. Friend the Member for Putney (Mr. Jenkins) for speaking on the motion to adjourn the House about the twenty-first report of the Reviewing Committee on the Export of Works of Art. I always think that it is very valuable in any Adjournment debate, as he said, that, apart from the constituency points that are very often raised in the House, a Member has the opportunity to raise a matter about a report in the debate, as my hon. Friend has done tonight.
As my hon. Friend said, the report covered a period when he was the Minister responsible for the arts in this country—and a very distinguished Minister. I shall certainly draw many of his remarks to the attention of my noble Friend the Minister for the Arts for further consideration by him.
My hon. Friend seemed to draw a distinction between the way that the chairman presented the report and the factual report itself. He condemned the presentation as propaganda against a wealth tax, but he rightly greatly praised the work that this committee has done. As my hon. Friend said, the composition of the committee has changed somewhat considerably—probably by the effluxion of time—since the report was prepared.
Concerning the wealth tax, I am sure that my hon. Friend will agree that the Chancellor of the Exchequer in whose province the tax proposals are, will take note of the points raised from behind me, tonight. The Government have yet to make an announcement on the wealth tax proposals in relation to the national


heritage. I cannot, therefore, as a Minister in the Department of Education and Science, say more. From the standpoint of the arts, however, the important issue is that any proposals that are put forward should not threaten the machinery and relationships that underlie the present effective system of export control on works of art. There are those who feel that my hon. Friend's arguments for deferment of tax, rather than exemption, would drive more objects towards export than would be in this country's interest.

Mr. Robert Cooke: Hear, hear.

Mr. Oakes: The Reviewing Commit tee put forward this view to the Select Committee, and I note that Lord Perth's letter of 29th July is reproduced in Appendix 1 of the report.
I am also sure that the Government will note the several points made about the import-export balance of works of art, to which my hon. Friend drew attention. As he knows, as an ex-Minister, it is very difficult to draw comparisons here. The number and value of exports are known but there are no comparable import figures. Her Majesty's Customs and Excise give figures that provide a rough balance over a much wider field. Whilst no reliable conclusion can be drawn in the absence of firm figures, one point not in question is that this country is still very rich in works or art. The export of works of art which are considered by the committee to be less than of the highest importance is undoubtedly significant to our balance of payments as a nation.
I should like to take this opportunity to pay tribute to the work of the committee as a whole, whose members put in a great deal of time in considering policy issues in this field and individual cases of works of art which are proposed for export. I join my hon. Friend in this tribute to the work done by the individual members of the committee.
As those who have followed with interest the recent detective work pursued in the columns of a national newspaper will know, the art world is a complex one in which great knowledge and care is required, not least by Governments. Over-simple recipes just do not work. Simple prohibitions can drive what is at least in this country a reputable trade into less reputable channels, and an attempt to enforce an absolute control

would not only be a major restriction on passenger movements but would also be extremely expensive and not very effective.
The question of retaining and conserving the national heritage is a complex and many-sided one. On the one hand, there is the extreme view that anything in this country which is museum worthy ought to be kept here regard. less of origin or cost. At the other extreme, there is the view that, a few exceptional masterpieces of native origin apart. a country in financial difficulties ought to use its works of art like any other natural resource to earn foreign currency.
If the first view had been held in the eighteenth and nineteenth centuries by those European countries which were glad to sell to the English milord on his Continental travels, we should not have the wealth of masterpieces that we have today.
But the truth is that neither extreme is a reasonable one. We must conserve the best of the works of art which are in this country with the resources we can make available. Our present system attempts to do just that. It is based on criteria set out in the Waverley Report, which only the most distinguished works can meet, and then seriously sets about trying to save the best works of art for the public collections. Owner and taxpayer are both entitled to a fair deal, and the system involves a fine balancing between the interests of either side.
I do not think that we should panic about the risks. There have always been, at least since the last war, grave risks to the works of art in this country, but so far we have been able to face the problem and deal with it.
It is the individual recommendations of the committee to the Minister for the Arts on the suspension for a specified period of an export licence for a nationally important object which undoubtedly catch the art headlines. The publicising of these decisions was, of course, strongly proposed by the former chairman, and was accepted by my hon. Friend when he was Minister as being in the overall interests of national and local collections which might wish to bid for the object concerned.
The report now before us does, however, show the generally valuable work


done by the committee in its general supervision of the operation of the export control system.
My hon. Friend mentioned the pressure that is upon us from countries outside Europe and North America for the restitution of works of art which now reside in some of our collections. I do not propose to reply in detail to this point. But many of the objects in question have undoubtedly had a better history—however they were acquired—of care, conservation and public access than if they had not been acquired by United Kingdom collections, and these benefits are available, at the United Kingdom taxpayer's expense, to anyone from these other parts of the world to see in London or elsewhere.
The best way to avoid illicit export or import of works of art is to contrive an effective form of control. The United Kingdom sets an example in this, as in other aspects of the arts—

Mr. Hugh Jenkins: I did not, in fact, make the point to which my hon. Friend is now replying. None the less, it is a suitable opportunity for the Government to state their position on the matter. But that position is being stated unprompted by me.

Mr. Oakes: Often, as my hon. Friend knows—he has done this himself—an opportunity to state the Government's position is taken in an Adjournment debate such as this. I was hopeful that my hon. Friend would mention this particular aspect. Since he did not, I certainly admit that I tried to put the Government's point of view in the debate. I know that the hon. Member for Bristol, West (Mr. Cooke) and my hon. Friend are interested in the Government's position on this aspect.
My hon. Friend particularly dealt with the report of the noble Earl, and with some justification—no matter what the hon. Member for Bristol, West said—pointed out that there may have been an undue bias in the way in which the report was presented.

Mr. Robert Cooke: Every single witness who attended the Select Committee

on the wealth tax, on the subject of the national heritage, except the hon. Member for Putney (Mr. Jenkins), shared Lord Perth's view—and they were chosen by the entire committee.

Mr. Oakes: That may be so, but I repeat that the actual decision about a wealth tax on works of art has not yet been taken. It is a matter for my right hon. Friend the Chancellor of the Exchequer, and my hon. Friend's views and those of the hon. Member for Bristol, West will be taken into account before that final decision is taken.
In his presentation of the report to the House of Commons, my hon. Friend was extremely fair. He said that there was a factual side to the report which he accepted and applauded but that there was another part which perhaps overbalanced towards a particular view about a tax, which is really a matter not for me but for my right hon. Friend the Chancellor of the Exchequer and another Department. My hon. Friend is entitled to express his view on that, as is the hon. Member for Bristol, West—

Mr. Robert Cooke: That is what the witnesses said, not what I said.

Mr. Oakes: The hon. Gentleman repeated what the witnesses said. However, we are dealing with the actual report of the chairman to the former Secretary of State.

Mr. Hugh Jenkins: This is precisely my point. We should not in this report be talking about a wealth tax at all. That is for the Select Committee. This is a report of the Reviewing Committee.

Mr. Oakes: I do not think that I can go that far. I do not think that a committee considering this matter could exclude the wealth tax. It would be disingenuous of it to exclude it altogether. But no doubt my right hon. Friend the Chancellor of the Exchequer will take note of the reservations put forward to this House by a distinguished former Minister for the Arts about what the report says about a wealth tax.

Question put and agreed to.

Adjourned accordingly at eight minutes to Eleven o'clock.